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This case scenario involves two family members serving as successor trustees of the family trust. Probate Realtor Kathleen Daniels explains reasons she may decline to work with an estate representative. An estate representative could be an executor or administrator of a probate estate or a successor trustee of a trust.
Case Scenario
We received a call from a co-successor trustee of a family trust. They had already interviewed several real estate agents, six (6) to be exact. During that process, they realized they needed specialized help that the other agents they interviewed could not offer. A search on the Internet led them to call Kathleen Daniels, Certified Probate and Trust Real Estate Specialist.
Concerns with Co-Successor Trustee in California
Having two people simultaneously in charge of a trust agreement can create problems unless the co-trustee’s duties are spelled out clearly in the trust. That was not the case with the siblings in this scenario.
The difference between a successor trustee vs co-trustee is that, per the terms of the trust, a single successor trustee is empowered to act independently without the approval of others. As a co-trustee, both parties must agree on the actions taken and decisions made. For example, how to improve a home before selling, who to hire to sell the home, if the real estate agent must have probate training, etc.
Decision-makers who cannot agree create an environment that often impedes the sales process and creates unnecessary delays. We may disqualify a co-successor trustee as a potential client for various reasons. When two or more decision-makers cannot agree is among those reasons.
We have been there and done that and found ourselves in the middle of a family feud. Selling a home and managing an estate is not a game. It is serious business.
During our initial consultation call with a successor trustee who lives locally, it was clear that the two co-trustees were not on the same page. They were not in agreement on many issues.
That led to having another consultation call with a successor trustee who lives out of state. This person was convinced they had resolved their differences. We were not so sure.
However, Probate Realtor (“CPRES”) Kathleen Daniels agreed to meet at the property. This step is a must if there is a chance she might agree to list the home. Upon entering the home, it was evident that there was still a lot of work that needed to be done. Kathleen was not told this prior to her agreement to meet at the property.
The bathrooms were torn out to the studs, the hardwood floors still needed to be refinished, and several rooms were waiting for tile to be installed. A painter was on-site finishing up the new paint job.
While previewing the home, the successor trustee was playing limbo, wanting to know ‘How low can you go?’ Need Probate Help – Probate Real Estate Services is a full-service brokerage. We are not what some people refer to as a discount broker.
By Law, Real Estate Commissions Are Not Fixed
The co-trustees agreed that they knew paying x% commission to the buyer’s broker was necessary to be competitive. They only wanted to pay x% (representing 1.5% less) to the listing broker. They also wanted the listing broker to pay for the cost of inspections and staging.
That would be a screaming hot deal for the sellers IF they could find a real estate agent desperate enough to accept those terms. Listing agents pay for marketing expenses such as photos.
All fees/commissions are negotiable between the seller and the broker. Our fees are based on the value we bring to our clients in terms of specialized training, experience, knowledge, and any additional services our clients need us to manage.
There is nothing in the listing contract that specifies that a probate Realtor listing broker is responsible for, required to, or should pay for seller costs and expenses.
In fact, the California Association of Realtors Residential Listing Agreement states the seller agrees to pay for the inspections and reports specified in the agreement.
This does not mean, however, that a seller cannot ask for the listing broker to pay for seller expenses or work for minimum wages for that matter.
Probate Realtor Specialized Services
We specialize in probate and trust real estate. Most homes we list are vacant. Many of our clients reside out of state. From our experience, most real estate agents leave a combo lockbox onsite and provide the combo code to service providers, and leave them on site unattended.
For safety, security, and liability reasons, it is our best practice to always be on-site with third-party providers. This means we are spending an unlimited number of additional hours at a property as it gets prepared for marketing.
Examples of additional specialized services may include, but are not limited to, facilitating:
- Removal of personal property
- Obtaining quotes/estimates of any kind
- Improvements (painting, new flooring, lighting, landscaping, etc.)
- Repairs of any kind.
- Professional cleaning of the interior
- Power washing exterior
- Interior and exterior window washing
- Other: any service that is necessary or desired to prepare the home for marketing
The duties of a listing broker are spelled out in the Listing Agreement. Listing brokers are responsible for managing the sales and escrow process. Costs for photos and other marketing materials are paid for by the probate real estate agent hired to list a home.
Over-Pricing a Home for Sale
The co-trustees believed their family home was so unique in such an incredible location that it was worth far more than any sales data supported.
Agreeing to list a home at a price that is not supported by the market data leaves a seller with the false impression that it may or will sell for that price. It sets unrealistic expectations that leave a seller disappointed, and the home remains on the market waiting for a price reduction.
The co-trustees wanted to list the home at $2,700,000 and “hoped to get $2,900,000.”
If Kathleen cannot offer prospective clients what they want, she will always step aside and let them find someone who will. These unrealistic sellers were the reason she let the co-trustees know she would not be moving forward.
Trust Real Estate Consulting Services
After Kathleen let the co-successor trustee know she withdrew from consideration, she received a call asking if they could hire her for consulting services. They knew they needed help because, in their words, “we do not know what we are doing.”
Our education, training, knowledge, skills, experience, and resources are reserved exclusively for our clients. Consulting is not a separate service we provide.
We made an exception for these co-successor trustees and provided them with the name of a local trust administration attorney, and at the same time let the attorney know Kathleen would not be representing them on the sale of the family home.
While we will never know all of the facts and details of what the co-trustees negotiated with the real estate agent they ultimately hired, we do know the home renovations were completed, and the home was staged.
The original list price was $2,700,00. Weeks later, the price was reduced to $2,400,000. It was later reduced to $1,999,000. The final sales price was $2,070,000.
Reasons Kathleen Daniels may not agree to list a home include:
- Working with co-trustees who do not agree
- Unable to come to terms on compensation
- Unrealistic expectations regarding price
- Consulting and resources are reserved exclusively for our clients
Not related to this case scenario, another reason might be if we can help a family keep their home, as we did with a probate home with a reverse mortgage.
We know we are not the right fit for everyone, and accept the fact that everyone is not the right fit for us.
Probate Realtor Kathleen Daniels is dedicated to doing no harm and to serving the highest and best for everyone, even if/when it means declining to work with a successor trustee, estate administrator, or any seller with wants, needs, or expectations out of alignment with her business model.