# Selling an estate property within the family



## DesignerDee (Apr 10, 2013)

I am executor of my parents wills, and the property will eventually need to be sold. There is an expressed interest from one of the grandchildren. Although one of my siblings thinks that her child should purchase the property, but has not specifically said that they are seriously interested in it. I suspect that they expect that they will get a 'cheap' deal because it is their child. Any suggestions about how to best handle the deal, and what is the best way for a valuation to be placed on the property. I have one real estate that will provide a letter of opinion for the estimate (it is suspiciously high) for a fee, and another real estate company that is providing an estimation, free of charge but will not do a letter of opinion (which is a more reasonable estimate). 
Naturally I want to keep peace in the family and prevent a rift between the two siblings whose children are involved. It was my parents wishes to keep the house in the family.


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## Mukhang pera (Feb 26, 2016)

Perhaps a good starting point would be for you to tell us what the will says about the house. For the moment, I am guessing that both parents are now deceased and they had mirror image wills and the last to die was the sole owner of the property. That is but a guess. Is it the principal asset of the estate?

As for valuation, the "gold standard" is usually an appraisal by an accredited appraiser. Where there is controversy, more than one appraiser is normal. If, for example, 2 siblings fail to agree on value, one solution is for each to appoint an appraiser and the appraisers appoint a third. The value is taken as the average of the 3.


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## DesignerDee (Apr 10, 2013)

That is correct Mukhang. They died within 6 weeks of each other, and there was nothing specific in the wills about the house. So as it stands the remainder of the estate will be divided equally amongst 8 siblings. 
I may have to go with what you have stated as the gold standard. I was not aware of the accredited appraiser route, until the agent that wouldn't provide a letter of opinion suggested to do it during our meeting.
I don't want one to say "if we knew you were selling it for that, then we would have bought it" - funny I can hear it already!


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## birdman (Feb 12, 2013)

I'm not a lawyer but I think that as an executor of the will you are required to get market value for the property and to sell it for anything less without listing it be a disservice to the 8 heirs. However, if all heirs agreed in writing to selling it below market perhaps it could be in order. Suggest you tread carefully or you could have 6 unhappy siblings. 
Once you have the appraisal as suggested I perhaps you could offer it to the highest bidder before listing on the understanding that the minimum bid would have to be the appraised value less real estate commission. Just a thought and something you may wish to confirm to the others named in the will.


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## Mukhang pera (Feb 26, 2016)

Btw, sorry for your loss, but perhaps a blessing they passed close in time. Again, a guess, but I gather it was a long marriage and it's hard for the one left behind to adjust.

So, from what you have said, the house was not the subject of a specific legacy, but fell into the residue of the estate, for the executor to deal with as part of the executor's duty to call in and administer the estate. Ordinarily in such case, the executor would get a few realtor's opinions, then list and sell the house.

Here, your folks expressed some desire to see the house kept in the family. Another guess is that desire was not expressed in the will, but in discussions with family.

You may have some feel for whether this is likely to arise, but, however you elect to place a value on the place, you may have 2 relatives come forward and say "Fine, I'll pay that." Then you'll be left at finding a way to break the deadlock. One way would be to review some old "Survivor" episodes and see how Jeff Probst dealt with the vexing question of tie votes at tribal council. There might be some parallels. Another way would be to direct sealed bids. Right now, my nose tells me that only one party is likely to want to pay fair market value. As you alluded to, someone else will only take it if it comes cheap.

Good luck.


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## AltaRed (Jun 8, 2009)

The executor "must" get a certified appraisal (or 2 or 3) if that executor wants to avoid 'stress leave' and 'high blood pressure medication'. There will be enough debates and haggles about who is getting what, and what is taking so long, and why you are the executor, etc. that you want to keep monetization of the house as clinical as possible. It might be possible to put a 24 hour 'right of first refusal' on any arm's length offers that are at or above appraisal price to allow a relative to purchase the home. That will cause some potential buyers to shy away from making an offer (I wouldn't do it if there was a ROFR on a property, for example) but it would be a way to demonstrate 'compassion' while sticking to your guns on keeping your executor responsibilities. The house has to be sold (registered) at fair market value anyway for property transfer tax purposes.


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## Just a Guy (Mar 27, 2012)

Best bet is to get the property appraised, then offer the property of the siblings at that price minus the standard realtor commissions. Technically,,they could also get it for 1/8th less if they kick in their "share". If no one bites on the offer, list the property and sell it for what you can get. Any family member can submit an offer to the realtor at this time, but wouldn't get the discounts. 

Then divide up the sale price and move on.

In truth, I'd sell the place outright and not even give people the option, which is well within your rights as executor, to avoid any hassles...and there will be hassles wherever money and more than one person is involved.


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## AltaRed (Jun 8, 2009)

Yeppers. An executor needs a thick skin at the best of times.

I've always said.... what did I do to piss you off so much that you made me an executor?


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> Best bet is to get the property appraised, then offer the property of the siblings at that price minus the standard realtor commissions. Technically,,they could also get it for 1/8th less if they kick in their "share".
> 
> In truth, I'd sell the place outright and not even give people the option, which is well within your rights as executor, to avoid any hassles...and there will be hassles wherever money and more than one person is involved.


JAG has a point that is is often done in these scenarios that a standard real estate commission is deducted from a sale in these kinds of circumstances, but there is no requirement in that regard.

As far as receiving credit for one's "share" if the house is being sold to a sibling, i.e., one of the named beneficiaries, then each sibling has, in effect, a 1/8th ownership interest and the purchasing sibling would be paying for the remaining 7/8ths. Here, I understand that the interested parties are grandchildren and not beneficiaries (apart from perhaps being contingent beneficiaries in case of a deceased parent). So the issue of a beneficiaries' credit would not arise, unless the purchaser's parent wants to put it on the table.

I part company with JAG where he says screw the parents' wishes, just sell and be done with it. I would make a fair effort to accommodate the parents' wishes. But maybe that's because I had a very good relationship with my parents for many years and I would see doing their bidding post mortem as entirely fitting. I recognize that view to be unbusinesslike, old-fashioned and outmoded. However, if seeking to follow the parents' wishes was going to lead to a dispute with no prospect of a peaceful resolution, then I would just sell, pass my accounts and wind up the estate.


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## AltaRed (Jun 8, 2009)

Mukhang pera said:


> However, if seeking to follow the parents' wishes was going to lead to a dispute with no prospect of a peaceful resolution, then I would just sell, pass my accounts and wind up the estate.


 Therein lies the primary issue. Keeping 7 other beneficiaries happy will be tenous at best and even the very best of families will have motivations, some underlying grudges, etc. that almost always manifest themselves when money is involved. Very rare is the 'leave it to beaver' syndrome. I just think the OP needs to work with certified appraisals around value, accommodate a family offer at/above that value where practical, and move on.


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## Mukhang pera (Feb 26, 2016)

AltaRed said:


> Therein lies the primary issue. Keeping 7 other beneficiaries happy will be tenous at best and even the very best of families will have motivations, some underlying grudges, etc. that almost always manifest themselves when money is involved. Very rare is the 'leave it to beaver' syndrome. I just think the OP needs to work with certified appraisals around value, accommodate a family offer at/above that value where practical, and move on.


Perhaps, it it really goes badly, the "move on" advice should be expanded to: do the deed, then get out of Dodge!


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## AltaRed (Jun 8, 2009)

I am a senior with a lot of senior friends. One would be surprised at how many, what seemed to be harmonious families, became acrimonious as soon as the parents died and money was involved. Very few estates with more than two beneficiaries settled without at least some controversy, including lengthy multi-year court battles in some cases. Is a reason why I am likely known here to be 'against' things like joint titles, joint accounts, etc, with parents. When it works, it works like a charm.... when it doesn't, it is pure hell.


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## Just a Guy (Mar 27, 2012)

Mukhang pera said:


> I part company with JAG where he says screw the parents' wishes, just sell and be done with it. I would make a fair effort to accommodate the parents' wishes. But maybe that's because I had a very good relationship with my parents for many years and I would see doing their bidding post mortem as entirely fitting. I recognize that view to be unbusinesslike, old-fashioned and outmoded. However, if seeking to follow the parents' wishes was going to lead to a dispute with no prospect of a peaceful resolution, then I would just sell, pass my accounts and wind up the estate.


You're misquoting me. There is no "parent's wishes" expressed anywhere. The will puts the house as part of the estate, it was not left to anyone, there was no intent to "keep it in the family" expressed in the will...that may be what the beneficiaries are thinking, but not what the parents thought.

Having been an executor numerous times, and seen what happens with families, I can tell you that, while it may not make everyone happy (nothing will), the easiest and cleanest solution is to sell stuff and give them cash. There is nothing close to a perfect solution when it comes to people and stuff.


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## DesignerDee (Apr 10, 2013)

Thanks for all the advice. 

Just to reiterate, there was no stipulation that the property stayed in the family, however the parents did state that it would be nice if one of us would take over the property. 
I will take my time with this one, and start with gathering the evaluations. Consult with the lawyer and go on from there. 

I do know that everyone agrees that it would be 'nice' to keep it in the family, but as we all know - when money is involved sentiment goes out the window!


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> You're misquoting me. There is no "parent's wishes" expressed anywhere.


I did not purport to quote you at all. The OP made it clear - both in the initial post, and in his reiteration - that it was common knowledge within the family that the parents preferred to see the house remain in the family. So, my point was, and remains, that I would see a moral duty to observe those wishes if reasonably possible.

You say, "there was no intent to "keep it in the family" expressed in the will...that may be what the beneficiaries are thinking, but not what the parents thought." How can you possibly reconcile that statement with the OP's last post, saying: "Just to reiterate, there was no stipulation that the property stayed in the family, however _the parents did state_ that it would be nice if one of us would take over the property." ? Let me repeat: " the parents did state". How does that square with your comment: "that may be what the beneficiaries are thinking, but not what the parents thought"? The OP has made it as plain as can be that the parents had different thoughts than those you attribute to them. Moreover, while you claim to have some insight into what the parents "thought", the OP has shared with us what the parents actually said. That the house stay in the family was not simply the product of some delusional thinking on the part of some beneficiaries.

I'll not resile from my comments, _supra_, where I attribute to you the view that the parents wishes, made known to the family beyond peradventure, should, in effect, be ignored or overruled, all because your endless experience as an executor dictates that callous approach.


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## Mukhang pera (Feb 26, 2016)

DesignerDee,

My apology to you for usurping this thread to the extent I have reacted somewhat negatively to JAG's post. Perhaps I should simply have ignored it. 

In the end, I hope you have gained some benefit overall.

My sincere good wishes.


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## Just a Guy (Mar 27, 2012)

Sorry, yesterday was one of those long days filled with pointless arguements it seems. I admit, I missed that part in the OP, even when I quickly reread it, and also overreacted to the original response. No offence was intended, as now I realize neither was it intended by your initial response.


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## Numbersman61 (Jan 26, 2015)

Appointing a family member as an executor often results in family disharmony with the executor often being portrayed in a negative light. I remarried when I was in my sixties a few years after my first wife died. Due to disparity in the value of our assets, we have prenuptial agreements and wills which were prepared in contemplation of our marriage. I chose TD to be the executor of my estate so family fights will be avoided. Family members are all happy with my decision even though the extra cost will be borne by them.


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## Mukhang pera (Feb 26, 2016)

Fair enuff, JAG. I as well could have been a tad more restrained in my reaction. You have retained my respect (not that I expect you were losing sleep over the prospect of losing it).


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## OhGreatGuru (May 24, 2009)

The executor has a fiduciary responsibility to all the beneficiaries. If he sells an estate asset at below market value to one heir, he penalizes all the others. And any or all of the other beneficiaries can sue him for this. Explain this to everyone, and maybe the person who thinks they should get a sweatheart deal for their child will understand; if not, you will at least have the support of (some of) the others.


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## marina628 (Dec 14, 2010)

One of our friends had a situation last year involving family home , two family members wanted it so he did the only reasonable thing he could think of and listed it on MLS .The first offer from one family member was outbid by $70,000 ,the second family member ponied up the cash and ended up paying over asking but that was fair market value.Either way somebody was pissed but at least the executor did the correct legal thing .


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