Ask Phyllis: a blog series of frequently asked real estate questions.
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 away last month. The family home is a fixer 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 probate or trust attorney to understand your rights and your sister’s 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.
