Deceased estates can be a tricky business

By VICKI HOLDER.

An ancient great uncle you never knew has suddenly died and left you a windfall. The good news is it's a property of considerable value. The bad news is he's also named nine other family members as beneficiaries.

Now you have to spend many hours meeting with these people in an effort to sort out what to do. Getting such a crowd to agree can become a nightmare.

It's not an uncommon situation, says Michael Boulgaris, of Barfoot & Thompson, Remuera. And though it can be fraught with dramas, the trick to making it work for everybody is to proceed according to the agent's well-organised game-plan.

"In my experience there are usually too many chiefs and fingers in the pot," he says. When he is appointed as the agent for a deceased estate, his first step is to meet with all the beneficiaries who will eventually sign the sales document. He gets them to appoint a spokesperson to act responsibly on behalf of the other family members.

He says it's crucial that an agent deals with just one person. "It's just like restaurants these days, which request one bill per table. Otherwise it's just too difficult. Any concerns the group might have, they should discuss among themselves and one person should come back to me."

Although Boulgaris has in the past sent everyone a copy of feedback reports on the property, it's preferable to send one detailed report to the person responsible.

He says there's often a lot of greed that sets in when people unexpectedly gain something for nothing and dissension is inevitable. "When someone wants to make a decision, there's always someone else who doesn't agree. My job is simply to sell the property and get the best price."

If nobody is living in the property, they need to organise somebody to look after it and maintain it for viewing or open homes. They also need to agree on possession dates that they can offer a purchaser.

If there are funds from the estate, they should put some money aside for marketing the property to ensure they reach as wide an audience as possible. When there are no such funds, they must decide how much they are prepared to contribute to make the marketing programme effective.

Before beginning the marketing, they should get a registered valuation. If one of the group wants to purchase the property to keep it in the family, then that's the way to arrive at a fair price.

Says Boulgaris: "My advice is always to auction deceased estates. Removing the price opens the property up for competition from the public. If the property is advertised as a deceased estate, people see it as a bargain, but their emotions tend to take over and they go for broke.

"It brings the buyers in. Almost 100 per cent of the time the property sells in excess of its value because of the greed of purchasers."

Setting the reserve is easy when it's based on the registered valuation. However, if feedback suggests the value of the property should be in excess of the valuation, Boulgaris will set it higher.

"It's not a problem, because the auction price will only go as high as the market is prepared to go anyway."

He warns against tarting up a run-down property. "Keep it original. It's part of the charm and sets the scene."

If there are overseas trustees involved and people can't be there at an auction to make decisions, Boulgaris recommends the tender process. That gives them up to three to five days to decide what they want to do, and allows time for people to re-group and discuss prices and conditions.