(From Land News & Listing Report – 03/15/2016)
When business decisions are clouded by personal relationship, bad things can happen.
Last week, I received an email from a landowner who wanted advice on how to sell his land. The land had been listed for two years and no offers had been received. He ended his email with “… the real estate agent is a good friend and I would never consider listing with anyone else.” Ironically, a few weeks earlier I had spoken to his broker. The broker said he didn’t know how to tell the seller that the land was over priced without jeopardizing their friendship. Their friendship was interfering with the broker’s need to be candid with his client.
A few months ago I got a call from a gentleman telling me of his dilemma. He and his wife’s brother bought 150 acres about ten years ago. Then five years later they decided to sell. His brother-in-law insisted that the land be listed with his wife, a St. Louis residential agent. This gentleman felt obligated and agreed; however, when the wife’s marketing efforts fell short, he suggested that the property be listed with a real estate agent who was more qualified. Unfortunately, his brother-in-law and his wife took the request “personal” rather than “business.” Since then, the families haven’t spoken and this has created tension among other family members. This problem was created because the arrangement was based entirely upon agent’s personal relationship rather than the agent’s qualification to sell land.
I recently met with a potential client who is the executor of an estate which included a 125 acre farm. About two years ago, they decided to sell, so he listed it with his next door neighbor. After a few months of no activity, they asked the agent if they should lower the price. The agent’s response was, “You’ll have to tell me what you want because you might be angry if I suggest a price and since we are neighbors I don’t want that to happen.” When the listing agreement expired, the executor would not renew. The agent/neighbor was offended. Now a few of the other heirs are angry with the executor because he listed with the agent only because he was a neighbor. There is even a greater problem here. A good argument could be made to the court that the executor had failed to perform his fiduciary responsibilities.
To avoid similar pitfalls here are questions to answer before listing with a friend, relative and/or neighbor:
Does the person have the knowledge/experience to sell my property?
Do I feel obligated to list because this person is a friend, relative and/or neighbor?
Do I really want this friend, relative or neighbor to know my business?
Will my information remain confidential with my friend, relative or neighbor?
If this person was not a friend, relative and/or neighbor would I still list my land with them?
What will be the consequences if I am dissatisfied and must terminate this person as my agent?
It’s not always easy to say “no” to a friend, neighbor or relative who wants to list your land. On the other hand, if the answers to any of the questions above make you uneasy, then the word “no” may be the best for all parities. (In the end, you might learn that they didn’t want the listing but only asked because they felt obligated to do so.)