Expert: Dick Dennis - 2/2/2012

Question
QUESTION: Hello Dick,
I recently made an offer for a house that is under a family trust.  My offer is the only one on the table, and the price matches their selling price.  I received a counter-offer, requesting that the trust members be given 45 days to back out of the transaction.  The house in question is in California.  I am curious if this is a law/regulation in California for homes being sold out of the trust.  Thank you.

ANSWER: It really has nothing to do with any law in California, Nesrin. It has to do with the art of negotiation. You made one little error: you offered what they were asking for the house.

Of course, you probably did not know that they were playing games with the selling of the property. Sometimes someone puts a property on the market just to see what kind of price it would bring. Even if the property was actually listed with a real estate broker and the potential buyer offers what the listing called for does not mean the seller must accept that offer. Of course, the broker would be entitled to receive his commission but the seller need not actually sell the property.

Someone in the trust may want to buy the property (I wouldn't be surprised if they are given the right to buy it for LESS THAN WHAT YOU OFFERED) and need 45 days to come up with the funds. Further, it wouldn't surprise me if the attorney who is part of the trust may be the person who wants to buy the property.

My recommendation, if it is not too late, is to make YOUR counter offer that says something like you offering a price that is about 10% less and there is to be a closing within 30 days and you have the right to have your own inspector check the property out. And if your bank should refuse your loan to purchase the property, then you shall receive your entire deposit returned. They may offer you the property at a higher price and if that price is acceptable to you, then you can accept it and move on to closing. If you are working with a knowledgeable Realtor, that person should know all these tactics I am recommending.

If they should give you ANOTHER counter offer, and it calls for a closing that is more like what you call for, then you know they are serious about selling it to you.

No offer to purchase is accepted until the seller has accepted and signed your offer AS IT WAS ORIGINALLY OFFERED. Past this stage, I would move on to the next house to purchase. I do wish you well.

Dick Dennis
California Real Estate Broker
License #00349415
dixiedee13@aol.com

---------- FOLLOW-UP ----------

QUESTION: Dick, thank you again for your information, and I agree with your assessment regarding my initial offer, but I also know the history and price points for that area, and know that it will sell the same day as listed.  At least I thought it would be that easy.  Not to beat a dead horse, but even my Real Estate Rep of 30 years has not seen this.  Allow me one more time with my question, to be sure that I don't make a mistake for my family.  In the Counter-Offer, listed as (45 Day Notice of Proposed Action ("NOPA").  Sorry, prior to receiving and reading, I referenced it as a 45 day of refusal.  I will summarize, and would really appreciate your expertise:  1) If beneficiaries consent to the NOPA, the escrow will conclude as normal (keep in mind that they requested a 60 day escrow period, stating that it gave the current tennant time to relocate???). 2) If one of the beneficiaries object to the NOPA, the trustee will begin a court action and escrow will extend 90 or more days, at which time the buyer can cancel the sale 3) An alternative action may be one for instructions to conduct a court confirmation of sale that approximates the procedures for probate real property sale under Ca probate law: If this occurs, the court can reject the sale or confirm a sale to another buyer who offers a bid higher than the sale price I agreed on.  I am then able to participate in the new bidding process.  Lastly, it is entirely up to the discretion of the trustee as to which action may be taken if there is objection to the NOPA......Long story made longer...Does this indicate that there is a problem within the group of beneficiaries, or is this simply legal jargon and normal proceedings for a Trust Sale....Thank you again.

Answer
You don't say if your "Real Estate Rep of 30 years" is a Realtor or real estate agent of any kind, Nesrin. If your rep is indeed a licensed real estate agent, according to the Code of Ethics for the Board of Realtors it is not ethical for another Realtor or agent to submit advice to a buyer or seller without the permission of that original licensed real estate agent.

Even though I have been a licensed real estate broker since 1971, I dare not offer you advice in this probate matter (which you never disclosed) without your agent's permission (if indeed he or she is a licensed agent) to do so. I do wish you well.

Dick Dennis