Q: The listing agent for my mom’s beach house is my brother-in-law, so I’m stuck. He doesn’t seem to know how to market the property to the right type of buyer, or he doesn’t want to spend the money to do so. I’m willing to do whatever I can on my own to reach the type of buyer necessary. Do you have any suggestions for me? I’m sending you the listing information separately.
A: This is a great example of why sellers need to tread carefully when hiring family members or friends to list their properties for sale. And why, if you are going to go in that direction, the ground rules of the engagement need to be carefully spelled out in advance, just in case the sale doesn’t go as planned.
But first, we looked at the property information you passed along to see if we could glean any insights into how the home is being marketed. We also looked at the listing information you provided and did a routine search for the property on the Internet. (We have intentionally omitted location details.)
The property seems to have been listed on the local multiple listing service as well as on websites such as Zillow, Trulia and the many other Realtor sites out there. The home has around 45 photos attached to the online listing and has an extensive description. The photos appear professionally taken, and the home appears staged and cleaned up.
The home is an expensive property on the beach that may have been affected by recent storms or may be affected by long-term climate change issues. There are around 15 listings of homes in or around your price range. Some homes are priced higher and some lower. Many of them are on the water, just like your mom’s. It appears around five homes have sold in and around the same price range during the past six months, and only about 10 sold in the past year. The home has been on the market for around five months.
Other than the home not selling fast enough, you didn’t give us any details as to why you think your brother-in-law isn’t doing a good job for your mom. Let’s just say it seems that from our cursory search, there is more inventory selling than there are buyers looking.
If 10 homes sold in the area in the past year and there are 15 listed, we could roughly say the inventory will take around a year and a half to clear out (if no new homes in the area come on the market). We’re just guesstimating this, of course, and there may be reasons other than the weather for slow sales. Your obvious next move is to sit down with your brother-in-law to talk about his perceptions (as a working professional in the local marketplace) about what he thinks is going on and what he thinks your mom’s next move should be.
The question you should focus on is why your mom’s home hasn’t sold yet. It certainly looks good on the listing and shows quite well (indications your brother-in-law is doing a good job), but there may be other factors at play, including whether your price (given local market conditions) is too optimistic, whether recent storms affect the willingness of a buyer to close on a home right by the ocean (where the risk of storm damage may be highest) and whether insurance costs are too high. We also don’t know if the economy in the closest metropolitan areas that would normally send buyers your way is faltering or if your state has announced it is opening a major highway in your backyard or something we can’t imagine.
These issues (and many more) play into how fast a home sells and at what price.
You may not have any great options: If you're eager to sell, you may want to lower the list price for the home. Despite what you may be reading online, some markets around the U.S. are experiencing a soft or softening real estate marketplace. Essentially, there are many more homes for sale than buyers out there willing to take a leap and close on a home.
You should talk to your brother-in-law and try to get a sense of the market, where it was, where it seems to be going, and what types of properties are selling and what types of properties are not selling. Given the unique nature of real estate, it’s quite possible your type of home is just not selling right now. That’s unfortunate, but it’s better to know the truth.
If you don’t want to reduce the price and buyers aren’t in the mood to buy this type of property, you’ll have to decide whether to keep the home (paying ongoing expenses, which will eat into whatever equity your mom has) and try to sell it at a later date, or figure out whether you can rent it for a year or two.
We’ve received many letters and comments over the years from readers complaining about their brokers not doing enough to sell their homes. In reality, agents and brokers are often doing the best they can, but the buyers simply aren’t there, even in an era of historic low interest rates.
This brings us back to the main point, which is that it can be rewarding or difficult to work with family members or close friends. Keeping open lines of communication is a good way to avoid resentment building up, which can needlessly destroy relationships.
Finally, this is your mom’s house, and unless she can no longer make decisions like this, and someone else has her power of attorney for financial matters, it’s up to her to decide whether she is pleased with the service her son-in-law is providing. Your best move is to respectfully discuss the situation with your brother-in-law and then ask your mom if the sale is going the way she planned. Offer to help if needed, and then step back and let the market dictate your mom’s next move.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask.” She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through Glink’s website, ThinkGlink.com.