To the extent that Massachusetts real estate is held by an Estate, there are a different set of rules which apply to the sale thereof. In a word, the estate fiduciary, even if give specific power in the Will to convey the property, is under an ethical obligation to obtain the best price for the property in question. It is my belief that this obligation extends even beyond the time that the Executor seeks a Probate approval of the sale (generally secured by obtaining a License to Sell, for which a petition is filed with evidence of the over-all fairness of the transaction in terms of the Estate).
In Purchase and Sale Agreements which I write for Sellers who are fiduciaries of an estate, I put in a specific provision that the purchase of the property on the terms sets for in the Purchase and Sale Agreement (including price) are subject to the Estate's receiving higher bids for the sale of the property prior to the closing. As I have articulated above, I am confident that this caveat is ethically required, and I can usually convince counsel for the Buyer that this is the appropriate way to proceed.
In my experience, most of the time the property is sold at the purchase price set forth in the Purchase and Sale Agreement, subsequently approved by a License to Sell, confirming the transaction. On the other hand, I have recently become aware of the following set of circumstances which either demonstrate ignorance of the ethical standards set forth above, or worse yet, "enlightened self-interest" ,shall we say ,on the part of the Listing Realtor.
The property in question was a desirable home in a desireable Boston suburb. There was much interest in the property, and my client, represented by a Buyer's Agent, had three (3) Offers prepared, each of which raised the purchase price offered. The Buyer Agent indicated, in writing, to the Listing agent that my Buyer wanted a chance to make a "last and best" offer. The time and date for the the offers appeared. My client's bid was lower than another. The property was sold to the other bidder.
The Estate, through the Listing Agent, never got back to my client, through the Buyer's Agent, seeking information about our "last and final". In point of fact, there was NO communication, at all, from the Listing Agent to the Buyer's Agent for my clients. The plot thickens; the deal that was accepted did not involve another Realtor; the Listing Agent got to keep all of the commission. Was that the reason there was no "follow-up" communication after the first bid? It surely looks so.
Transactions like this one call into question how we operate as professionals. I wanted to let each of you know what the rules are with the thought that high-principalled professionals almost always follow the rules when they have been apprised of them. The Estate did not get as much money for the home, as they should have gotten. That is wrong!!! Whether there will be any opportunity to "re-open" this situation seems unclear. What is clear, however, is that the Listing Agent appeared to operate out of self-interest to the detriment of his or her client. None of us benefits when that situation arises!!
Comments(30)