In most listings, sellers are keen to sell and willing to cooperate to get the best price possible in a reasonable amount of time. Traditional real estate practices are designed to assist sellers in achieving those goals.
However, in divorce cases, the sellers frequently have goals that do not align, presenting professional and ethical dilemmas for Realtors.
- The Path of Least Resistance and Its Hidden Costs
Often, one of the sellers will be more cooperative than the other. The temptation to accommodate the more difficult seller is a natural human and business impulse. Conflict is time-consuming, emotionally draining, and can stall a transaction. However, this “path of least resistance” is fraught with peril:
a. Breach of Fiduciary Duty: A real estate agent has a fiduciary duty to all sellers. When the parties disagree on a course of action, the Realtor needs to make a recommendation on the best course of action and attempt to resolve the differences between the sellers. More often than one might think, the Realtor instead sides with the more difficult party, effectively breaching that duty to the other seller. The other seller, by being reasonable, may be penalized and may receive less from the sale than they are entitled to or could have achieved.
b. Sub-Optimal Outcomes: The more difficult seller’s demands are often not in the best interest of the other party. For example, refusing a necessary price reduction, vetoing a strong buyer for a trivial reason, or refusing to complete minor repairs can lead to a lower final sale price, a failed escrow, or a significantly prolonged time on the market. The entire transaction suffers to appease one party.
- The Crucial Distinction Between Speed and Best Interest
A prompt sale can be a legitimate primary goal. However, it is not appropriate for the Realtor to assume that speed constitutes the best course of action. The agent’s role is not to decide the best course of action but to facilitate compliance with a court order or a conscious, informed decision by both parties.
- The Vacuum of Authority: Vague Court Orders and the Need for a Framework
The root of the problem often lies at the beginning. A vague court order that simply mandates “the property shall be sold” provides no guidance for the inevitable disagreements. Key terms like primary goal (max price vs. max speed), distribution of proceeds, removal of personal property, control and occupancy of the property during the sale period, and responsibility for costs are left undefined. This lack of a pre-established framework may lead a Realtor to step into a role they are not authorized or equipped to fill: that of an arbitrator or judge.
- One Solution and Its Drawbacks: The Realtor as Arbitrator
The parties can stipulate to abide by the Realtor’s recommendation in a dispute. While this provides a clear path forward and can break impasses, it places a significant burden on the Realtor, exposing them to potential liability and accusations of bias from the “losing” party. It transforms the Realtor from a facilitator into a decision-maker, a role which exceeds their responsibilities as defined by statue and rule, and which conflicts with their core advisory function.
(My addendum to listing agreements states that I will not serve as the decision-maker. This does not prohibit the parties from stipulating that in the event of a disagreement they will abide by my recommendations, but it provides my brokerage with some protection against a claim that I have overstepped my role.)
- Conclusion
The challenge of representing divorcing sellers is not merely in managing personalities; it is in establishing a clear and enforceable structure for decision-making. The “path of least resistance,” where the agent appeases the more difficult party, is a professional trap that sacrifices the interests of the reasonable client and often the overall success of the sale.
The ideal resolution lies in a multilayered approach:
Pre-Listing Advocacy: The Realtor’s first and most crucial role is to counsel the sellers (and, ideally, their attorneys) on the value of a detailed and specific court order or listing agreement.
Guiding, Not Deciding: When conflicts occur, the Realtor’s duty is to facilitate communication, clearly outline the financial and practical consequences of each position, and attempt to find a compromise.
If All Else Fails: The Realtor must guide the parties back to their stipulated framework and their legal counsel and the court.
We offer comparative market analyses and listing services on all islands. Just get in touch and we’ll be happy to help.
