Saving On The Commission?

Dear Phyllis,
My sister is the trustee
of our parents’ estate. Our
mother passed away two years
ago, and our father just passed
last month. The family home
is a fi xer with a guest house
over the garage.
My sister has very limited
work and business experience,
yet she has decided she does
not want to pay a Realtor’s
commission. Instead, she
plans to approach the landlord
next door to see if he wants
to buy the property. If he
declines, she intends to reach
out to a few builders who have
recently completed projects on
the street.
My brother and I are
concerned this approach may
not result in the best outcome
for the estate.
What is the
best way for us to address her
concern about saving on the
commission.
Thank you.
— Upset Brother

Dear Upset Brother,
You’re right to be concerned.
While your sister’s plan seems
simple, it creates real risk.
Most importantly, it may leave
money on the table and invite
disputes.
A trustee must act in the best
interests of all beneficiaries.
Therefore, she must make a
reasonable effort to secure
fair market value. However,
approaching one neighbor or a
few builders – without broader
exposure – can fall short. As a
result, even good intentions
can be challenged if the sale
price appears too low.
In addition, a fixer with
a guest house can attract
many buyers. For example,
investors, builders and
end-users may all compete.
Competition drives price.
On the other hand, limiting
buyers reduces it.
To move forward, consider
these steps:
• First, encourage her to
get one or two opinions of
value from experienced local
Realtors. This is only for
information.
• Next, suggest she list the
home subject to achieving a
net higher than any investor
offer.
• Also, remind her – 
gently – that her role is to
maximize value, not minimize
commissions.
• Finally, if needed, consult
a trust attorney to understand
your rights and her duties.
Ultimately, the goal is not
to win an argument. Instead,
focus on protecting the estate
and ensuring a proper process.
By framing the discussion
around her responsibility, you
can keep the conversation
productive.
Warm regards,

Phyllis