PAULA'S SOUTHAMPTON BLOG: DO YOU EVER TAKE A "FOR SALE BY COMMITTEE" LISTING?...IF SO READ ON...

DO YOU EVER TAKE A "FOR SALE BY COMMITTEE" LISTING?...IF SO READ ON...

DO YOU EVER TAKE A "FOR SALE BY COMMITTEE" LISTING?...IF SO READ ON...FOR SALE BY COMMITTEE

 

FOR SALE BY COMMITTEE...Your Good guidance is crucial in a Trust or Estate real estate sale. After recently handling several listings of this sort, I figured I would share a little of what I have learned from those and give you all a heads up just in case you have not had this kind of experience:

 

WHEN YOU LIST A HOME that is part of an estate or is in a Trust, you need to know what this will mean in terms of your time and your efforts. There are so many waysFOR SALE BY COMMITTEE that the listing that you agree to handle for a Trust or an Estate is so very different than a typical home sale listing. First of all, you need to establish what is required of you as the listing agent:

  • Who do you report to?
  • Who will be handling negotiations from the selling side of a deal?
  • Will it be multiple family members or beneficiaries?
  • How does the dispersal of funds get handled when a property is sold for an estate or Trust? (your commission, in other words)
  • Will the trust handle any inspection issues if you have a buyer who wants to do an inspection before making an offer? 

Then there are the BIG differences when you are dealing with multiple parties on a listing:

  • The trust or "committee" will want to set their own price and it can be substantially different than what you know the market will pay.
  • Rarely will you get all "on board" when it comes to a price change or a even a counter to an offer. Driving this is the usual need for the beneficiaries to realize a certain dollar figure so they can buy something else or so they can payoff big bills.
  • In my experience, unless you have a very open and willing team that you are dealing with, it will be one of the more difficult listings you will ever handle. 
  • It will take a collective agreement to handle any problems that arise on the property. Timing can be thrownFOOT DRAGGING TO HALT A DEAL way off by one individual's foot dragging.
  • There is a vested interest on the part of all involved to get the exact asking price or very close to it.
  • If you are accustomed to negotiating on an offer from a buyer, be prepared for a very different sort of negotiating.
  • Your flexibility is essential when handling an estate or a trust for a family--your understanding is required because there is usually a death involved with the listing.
  • In an estate or trust you will be dealing with a different mindset than an individual homeowner who is trying to list and sell his or her home.
  • On the other hand you may be dealing with a sibling or siblings that have no tolerance for the necessary time frame involved in selling an estate...They may want or need an immediate sale and as we all know that is not predictable.

THERE ARE MANY DIFFERENT TYPES OF "SALES BY COMMITTEE"

In the last year I have handled 3 different types of estate sales:

  1. A Trust where I had a team of lawyers or legal professionals that I had to work with, or a board of trustees.
  2. An estate sale where I was dealing with the 5 siblings of the deceased parents. Each sibling had their own needs that had to be met...It was a committee that met each time an open house was to be held; each family member had the use of the house every third weekend. So there was a constant interruption of a relaxing weekend that had to be dealt with....Not easy with 5 different personalities! One of them in particular was in a chronic bad mood and confronted me each time I tried to show the house or hold an open house..
  3. A Living Trust where the offspring were left to handle the dispersal of the property so the very elderly parent could FOR SALE BY COMMITTEEget the medical care they needed. This was the saddest case for me; the Mother was very ill and needed money to pay for the medical treatment, the nursing home and the doctors who were making visits to the home until she could enter the nursing home.

6 months into the listing, the Mother died and all 4 of the siblings were laid low by her death. No one wanted to sell the house--no one had the final say as to what would happen if it did not sell and with their heads in the sand, all 4 of them decided to pull the listing and I watched as they slowly slid into lispendens, foreclosure and then lost the house.

In today's "Graying" of America with so many elderly parents and with siblings sharing the care of the parents, there are more and more of these listings coming available.

HAVE YOU HAD SIMILAR SITUATIONS? HOW DO YOU HANDLE THIS TYPE OF LISTING? PLEASE SHARE A STORY IN YOUR COMMENT BELOW:

 

 

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                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate

 

Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:  http://www.elliman.com/paulahathaway

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Comment balloon 33 commentsPaula Hathaway, REALTOR, LBA • October 14 2013 04:43PM

Comments

If there is not one person who has the final say - whether a Trustee, or a Lawyer - then I don't want the Listing, thank you.

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) almost 5 years ago

Paula, I've had several of these recently and have been lucky to have had one person in the family who was authorized to sign the paperwork, and they dealt with the rest of the family members or other heirs.  And having an estate property that's been placed in a trust makes such a huge difference.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 5 years ago
Hi Paula, These are never easy just handling the paper work but there has to a one spokesperson that is responsible for decisions,
Posted by William Johnson, San Diego Real Estate Voice, GRI CRS e-Pro CDPE (RE/MAX Associates) almost 5 years ago

Paula, wow, great lessons learned - thanks for sharing!

Posted by Ann Zieve, Unmatched Ownership Experience (Keller Williams Success Realty) almost 5 years ago

Thanks for the great information provided.  A lot to think about.

Posted by Richard Weeks, REALTOR®, Broker almost 5 years ago

Paula, whether for a family trust or a group such as a church, it's best for the group to select one member with whom to communicate during the listing and sale of the property. Addressing this issue at the initial consultation allows the group to talk amongst themselves, if they need to, prior to signing the listing agreement. 

Posted by Maria Morton, Kansas City Real Estate 816-560-3758 (Chartwell Kansas City Realty) almost 5 years ago
Paula, Excellent descriptions on what is involved in different types of estate sales. We had one this year that involved a total of 15 heirs from multi marriages, many of whom did not like the others. It took months to round them up and get them all to agree. But we did close.
Posted by Bill and MaryAnn Wagner, Jersey Shore and South Jersey Real Estate (Wagner Real Estate Group) almost 5 years ago

I've been very lucky in the ones I've had.  In each case there was one sibling in charge, though all information was transmitted to the group before a decision was made.  It is much more difficult where there is dissension in the family.

Posted by Geri Sonkin, Long Island Real Estate & Staging Expert (Douglas Elliman Real Estate 516-457-7103) almost 5 years ago

Paula, I've worked several of these types of listings over the years. The biggest problem is when one of the members of the committee isn't on board with the purchase or sale. Working with a CEO who has to consult with the Board of Directors for every little thing can be both time consuming and non productive.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 5 years ago

I'm glad that most of my estate business is referred by a very good attorney that can get his clients to understand what's best for them.

Posted by Marc McMaster, Putting my clients before myself (RE/MAX Centre Realty) almost 5 years ago

Fred: I second that! It is so important to know what you are dealing with because then your approach can be more firm (you are dealing with lawyers after all!)and more than likely successful....

Patricia: I have had both recently too and it is much easier to deal with a trust---because they do thia ll the time...family members are another whole different deal!

William: You are so right...In one case I had the biggest problems with 5 family members; one member just did not like me---can not help that but he went to great lengths to get me off the listing. I hung in there and then asked that they designate one person to handle everything and that's when it all turned around....

Ann: Yes and I hope this helps any other members who may have the same type of listings....

 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

I had an estate listing but it was not as tasking as an executrix or executor has been named on the will.

I did represent a buyer who bought a house owned by a church and it had to be approved by the committee.

My question to the listing agent was how many parties are authorized to sign and how long it will take for the committee to approve the sale. There were some corrections on the title that the sellers' lawyer needed to iron out but we did close on a timely manner.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) almost 5 years ago

Richard: Thank you for reading and understanding the issues that can come up....

Maria: In many cases there is a person in the family who steps up and takes the reigns but there needs to be an official designation to make a difference.

Bill: What a group! it is so hard to get 3 people on the same page much less a group of 15!

Geri: That is the other thing---sibling rivalry! That is the worst...

Michael: On the last trust I worked on, I worked very hard on the relationship with the lawyer who was handling the whole affair and that made it move very quickly--I was very happy to see things move quickly to closing on that one!

Marc: That helps if you have a good relationship with an attorney!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

Paula...

I will take these is there is one authorized executor that can sign. Otherwise, as you stated, it is nearly impossible to ever get a consensus on anything.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) almost 5 years ago

I have not had experience with any of these types of sales yet, but found this extremely helpful information in preparing me, just in case.

Thanks for sharing.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) almost 5 years ago
These can be really challenging because of the emotions often involved. I've been lucky to be involved with several where either one heir had been chosen to be the decision maker or where the various heirs were congenial & realistic in their expectations. But can also remember a few where one heir (almost always from some distant state) clung to an unrealistic hope for the house to be worth a price that might not be realistic for decades. And the toughest - one heir who cannot bear the thought of the family home being sold (but also without the means to buy out the other heirs & keep it). Takes tons of patience, empathy, & understanding.
Posted by Nancy Conner, Olympia/Thurston County WA (Managing Broker - City Realty Inc) almost 5 years ago

I appreciate your idea of "selling by committee."  Recently I had something like this - not a trust, but rather 3 siblings that swooped down after I had listed the house with their father.  They didn't like the price - and upped it by over $200,000 (a 77% increase.)  It's a nightmare to get one of them to understand, let alone three!

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) almost 5 years ago

Great read Paula.  Since I don't take listings as an exclusive buyers agent, really don't have the insight.  But from your post, which was insightful, they're not easy listing! 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) almost 5 years ago

I've only had the 3rd situation which was physically and emotionally draining and lasted 18 months.

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) almost 5 years ago

It was an escrow officer that open my eyes to this post subject years ago. Who can sign and bind is a biggee

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) almost 5 years ago

Richard: You are so on target...the chance that you won't have problems is highly unlikely. There are usually one or two personalities that become the swaying factor and those are not usually the one designated to handle the whole affair.

Kat: You are more than welcome---Take what you can from here and in the comments too because there are many members who have dealt with even more than I have!

Nancy: You have a lot more patience than I have when dealing with troublesome siblings or beneficiaries. I usually take a hard stance from the beginning and keep the problematic ones in the cross-hairs, so to speak. If I detect some interference in the deal I will make sure the individuals know that I am aware of who is stirring up the pot and go directly to them if need be. Here is where I fully agree: You need to keep the emotions of the situation in mind and a little diplomacy will go a long way to keep things from disintegrating.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

Margaret: You are so right--three is a crowd when you are trying to negotiate a price or a term or any other sort of agreement to the contract. Even when there is one in charge it is very difficult to keep the others from trying to sway things.

Carla: You can say that again--they are the most difficult and yet there are a few banks with trusts that are well handled and those usually do not fit the category of what we are talking about here.

Jill: Those are the worst! I hope I don't ever again have to handle one of those---I can be very strong and  very much unaffected by most events but that kind is very emotional and difficult.

Richie: Oops,  almost wrote "Biggie" instead of Richie! :) That is a very good description of what ensues, in a nut shell! Thanks for your observations and input!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

Maria: Good for you! I think your question to the agent about the numbers of people who have to sign the contract etc. and the length of time to close is the best one yet---make them familiar with the timing and deadlines and then sit on them until they all co-operate.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

I just closed one of the "committee" listings. I had one point of contact after the initial meeting. We set the listing price in that initial meeting. It was a dream deal. They listed the house at a reasonable price point, and we found a buyer quickly.

All was not so smooth, however, during another one of my "committee" listings. Only one sibling lived locally, and she turned out to be the wimpy one. It was a nightmare, but the listing finally did close.

I would add to your list of great ideas, though, one point: Get address, email, phone number, spouse name for all of the committee members, just in case.

Posted by Liz Lockhart, GRI, Cape Girardeau Real Estate (Riverbend Realty, Cape Girardeau, MO) almost 5 years ago

I had the second scenario - an estate sale - and I was working with a handful of adult children of the deceased parent's home.  You are right - it was the worst listing I've had.  The successors had so many strong emotional ties to the house that no buyer fit the bill, they did not price right, one was living in the house part-time and was a day sleeper on top of it, and the leader of the siblings didn't want to have anything to do with this yet he was the one I was supposed to contact.  That was only one of the problems.  Then of course there were the technical issues of title, seller disclosure statements, what type of deed they were conveying, etc. 

Posted by Francine Viola, Realtor, In Tune with your Real Estate Needs (Coldwell Banker Evergreen Olympic Realty, Olympia WA) almost 5 years ago

Had a listing with two brothers. Each brother and his wife was a tenant in common with the other brother and his girlfriend. Each brother and wife/girlfriend then held their interest in joint tenancy. It was a nightmare, because one brother and his wife were in charge of the listing, but the other brother didn't like me. Seems that I had "slighted" him on the phone when I had asked to speak to his girlfriend and didn't ask how HE was doing. Jeezzz... Give me a good old estate sale any time!

Posted by Hella Mitschke Rothwell, Hawaii & California Real Estate Broker ((831) 626-4000) almost 5 years ago

Paula, great, great job of clarifyiing and distinguishing between different types of sales, "sellers" and the types of issues you as a broker can run into with an estate/trust sale.  Makes you want to shake your head and say "am I sure about wanting to take this on"?

Posted by Kelly Young, Colorado Springs Real Estate ~ 719-226-0126 (The Platinum Group Realtors) almost 5 years ago

Liz: That s a great suggestion---just to make sure they can't disappear on you do need too have the contact information!

Francine: Boy! Does that sound familiar...I have seen layers of complications as well and it is no fun to try to convince a sibling that the price they all think is the right one needs to be significantly discounted just to get showings.

Hella: Now that one sounds like a real nightmare! Dealing with the different personalities in that kind of a listing can drive you to drink!

Kelly: I have always said that if, when I first became a real estate agent, I worked with one of these "for sale by committee" I would be out of the business today....

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

I represented a buyer who wanted a FSBO that was listed by siblings.  Wow, just dealing with the two siblings was tough.  I don't know if I would want to enter into what could be a long term agreement with a committee!

Posted by Kim Peasley-Parker (AgentOwned Realty, Heritage Group, Inc.) almost 5 years ago

Great post Paula!  Thanks for sharing what this experience is like.  I've never been on the listing side of this normally just on selling side.

Posted by Ava Anderson, Selling Atlanta from A-Z! (A-Z Atlanta Realty ) almost 5 years ago

Kim: I have dcided not to take another lisitng like that!

Ava: Well, selling them can be just as rough timing wise. I have had an offer take a few weeks to get a counter!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 5 years ago

Well stated Paula.  Been there on both sides of the transaction, and it can be a nightmare.  The old adage, "too many cooks spoil the broth" certainly applies.

Posted by Marti Steele Kilby, CRS, Broker/Owner, San Diego, CA (Steele Group Realty) over 4 years ago

Marti: Yes it does...I have had my  share of them too and it is not something I look for; they come to me for some reason!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 4 years ago

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