SELLING ESTATE PROPERTY

James L. Goldsmith, Esquire

There are a number of ways you might be asked to list and market the property of a deceased owner. A call from a child, an executor, or the attorney representing the estate are common. One REALTOR® who recently called the Legal HotLine took such a call from the estate's attorney. This REALTOR® obtained a key from the attorney, went to the property, measured, photographed and inventoried fixtures and personalty likely to be included a sale.

Back at the office, our would-be listing agent researched tax records, zoning, prepared a suitable description and completed the paperwork necessary to submit the listing to the MLS. He also prepared a well documented CMA.

So what went wrong? Well, as all of this was coming together, and just before the listing agent sought signatures for his listing agreement, he got a call from the lawyer. The lawyer had recently taken a call from a buyer whose father lived in the neighborhood of the decedent and who knew that the house would be sold. The buyer made a reasonable offer and the estate accepted. The lawyer, who had fiduciary obligations to the estate, was very sincere in his apology to the listing agent! He really anticipated giving the listing to that agent and while he hadn't been marketing the property, what could he do?

As with many sad tales, there's a lesson to be learned and in this case it is quite simple: without a written agreement, signed by the right persons, you don't have a listing! The written agreement part is easy: use the standard Listing Contract. Getting the right person(s) to sign the agreement is not always easy. How often do you verify that the title owners are who they say they are? Most often they are, but at the time of listing there are many licensees who only assume that the good folks who are signing are indeed the lawful owners. In the case of an estate, most listing agents are too trusting.

The attorney for the estate, an agent holding power-of-attorney of the deceased owner, or child or sibling of the decedent may lack the lawful authority to sign a listing agreement. Only the lawfully authorized person(s) have the power to bind the estate to a listing agreement. The executor (male), executrix (female) or executors (multiple persons) have the authority in the case of an estate of a person who died with a will. Dying intestate (dying without a will) results in the appointment of an administrator (male), administratrix (female) or administrators (multiple persons). These lawfully recognized representatives of the estate will be able to demonstrate their status with appropriate documentation. Letters Testamentary or Letters of Administration are issued and each representative should have multiple short certificates issued by the Register of Wills indicating the names of the lawful representative(s) of the estate. You must obtain the signature of all persons with that authority. Having the signature of two of the three executors is insufficient! The signature of any attorney who represents an estate, but who is not the executor/administrator, is insufficient. Perhaps you have had good experiences in the past when your listing agreement has been signed by the attorney who represents the estate, and that's great. I am not saying that you will necessarily be deprived of the opportunity to follow through with the listing and earn a commission; I am merely passing along a warning. While the lawyer may not seek to upset your listing, you are in violation of RELRA's requirement that you have proper written authority of the owner before marketing a property for sale. Only lawfully recognized executors and administrators have the authority to act on behalf of the deceased owner.

Copyright © Brett M. Woodburn, Esquire, CALDWELL & KEARNS, P.C., 2008

All Rights Reserved

Mr. Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. He routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. He may be reached at realcompliance.com.