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

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896

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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Ambassador
1,726,157
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

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.

Oct 14, 2013 11:34 PM #14
Rainmaker
1,426,862
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

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.

Oct 15, 2013 12:03 AM #15
Rainmaker
631,213
Nancy Conner
Olympia, WA
Olympia/Thurston County WA
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.
Oct 15, 2013 01:53 AM #16
Rainmaker
1,071,671
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

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!

Oct 15, 2013 02:52 AM #17
Rainmaker
1,559,470
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

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! 

Oct 15, 2013 03:25 AM #18
Rainmaker
749,559
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

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

Oct 15, 2013 03:39 AM #19
Rainmaker
2,444,719
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

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

Oct 15, 2013 03:41 AM #20
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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.

Oct 15, 2013 04:46 AM #21
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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!

Oct 15, 2013 05:05 AM #22
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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.

Oct 15, 2013 05:19 AM #23
Rainmaker
303,859
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

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.

Oct 15, 2013 11:50 AM #24
Rainmaker
518,675
Francine Viola
Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA
REALTOR®, In Tune with your Real Estate Needs

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. 

Oct 15, 2013 12:40 PM #25
Rainmaker
686,609
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

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!

Oct 15, 2013 01:06 PM #26
Rainmaker
450,138
Kelly Young
The Platinum Group Realtors - Colorado Springs, CO
Colorado Springs Real Estate ~ 719-226-0126

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"?

Oct 15, 2013 01:31 PM #27
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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....

Oct 15, 2013 06:59 PM #28
Rainmaker
331,963
Kim Peasley-Parker
AgentOwned Realty, Heritage Group, Inc. - Sumter, SC

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!

Oct 16, 2013 12:17 AM #29
Rainer
272,972
Ava Anderson
A-Z Atlanta Realty - Snellville, GA
Selling Atlanta from A-Z!

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.

Oct 16, 2013 12:45 AM #30
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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!

Oct 16, 2013 06:18 AM #31
Rainmaker
293,046
Marti Steele Kilby, CRS
Steele Group Realty - La Mesa, CA
Broker/Owner, San Diego, CA

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.

Oct 20, 2013 10:34 AM #32
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

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!

Oct 21, 2013 01:24 AM #33
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...The Most Informed Agent In The Hamptons!
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