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Realtors®: When should you REJECT an Offer? QUIZ TIME!!

By Regina P. Brown

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

February 27, 2010 04:51 AM

As a listing agent, you receive an offer on your listing. You should reject the offer when:

The offer doesn't make sense or seem reasonable
It looks illegal
You don't like the buyer's agent
Your commission is too low
NEVER

Yes, this is a trick question! The correct answer is #5, NEVER. Why? You should never, ever reject an offer. Because YOU are not the Seller. Your fiduciary duty is to present every offer to your Seller.

So what should you do when you receive an offer?

1. Take a notepad and pen and sit down with the offer. Read the entire offer. As you read, write down questions. Write down pros & cons of items that concern your Seller.

2. Call the buyer's agent and acknowledge receipt of the offer, thank her for the offer. Get all your questions answered. If the buyer's agent cannot answer all your questions, or if you have legal questions, consult your broker and/or your in-house attorney.

3. Call your Seller and make an appointment to meet them in person. (If you cannot meet the Sellers in person, make a phone appointment and email the offer to them before your phone appointment with them.) Remember, you should point out the pro's & con's of each offer, you can make recommendations, you can advise sellers to consult their attorney and tax preparer. But the FINAL decision to accept or reject the offer is theirs!!!

4. Have your Sellers sign to accept the offer or sign to reject the offer. Be sure to have them reject in writing so you can prove that you presented the offer and the Sellers chose to reject it, NOT you!

5. Send the signed offer back (either accepted or rejected) to the buyer's agent within the time specified in the offer. Be courteous and if the offer was rejected, write a short explanation. For example: "Sellers received 5 offers and they selected another offer."

CONCLUSION: Always remember who the seller is and your fiduciary duty. And be courteous enough to develop professional working relationships with other agents along the way!

Regina P. Brown

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Candice A. Donofrio

Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ

928-201-4BHC (4242) call/text

I LOVE SLO, it is one of my favorite places on the planet. :)

And yes, there really are very few reasons to outright reject an offer and none of them are anyone but the seller client's.

Feb 27, 2010 04:53 AM

Paul Hodge

Keller Williams Realty / Lake Norman-Cornelius - Huntersville, NC

Regina, great post. I would seem that most of this would be common sense for the average Real Estate agent, of course we all know that common sense isn't all that common!

Feb 27, 2010 04:54 AM

Lottie Kendall

Compass - San Francisco, CA

Helping make your real estate dreams a reality

Good reminders, Regina. Many agents in my area don't return an offer with the seller's signature rejecting it--we all should. Thanks for making that point.

Feb 27, 2010 04:55 AM

Karen Fiddler, Broker/Owner

Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA

Orange County & Lake Arrowhead, CA (949)510-2395

Yes, yes, yes.....it drives me nuts when an agent tells me up front that my offer won't be accepted. I can't tell my buyers to raise their offer on the word of a listing agent. I also find that listing agents of short sales sometimes so severely limit the access to the listing so they can double end...figuring the seller doesn't really care. Who are they to decide that?

Feb 27, 2010 04:56 AM

Glenn Roberts

Retired - Seattle, WA

All so very true and your method to work through each offer is detailed and complete. We used to have selling agents present offers directly to the seller and agent . In the case of multiple offers, I like that as the seller and agent get to assess the capabilities of the agent that you may be working with to close the transaction. It also gives the seller a better grasp of the process than just having a sheet with words. When there is only one offer it is less important to me.

Feb 27, 2010 04:57 AM

Sherry Siegel, Managing Broker, EcoBroker, ABR

BrokersGroup, serving Sequim and Port Angeles - Sequim, WA

Regina, once again you've provided a detailed blueprint for how-to...in this case, how to fine-tooth comb over an offer received on behalf of your seller. This approach makes sense even when an offer is so good we can hardly believe it.

Feb 27, 2010 09:49 AM

John Novak

Keller Williams Realty The Marketplace - Las Vegas, NV

Henderson, Las Vegas and Summerlin Real Estate

I got the quiz right, and for the right reason! And we always strive to make some kind of counter offer, to put the ball back in their court.

Feb 27, 2010 09:57 AM

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Thank you fellow AR's for stopping by to read & comment. This blog was written out of frustration with my colleagues who breach their fiduciary duty by NOT presenting certain offers to their seller!

Feb 27, 2010 01:46 PM

Melissa Zavala

Broadpoint Properties - Escondido, CA

Broker, Escondido Real Estate, San Diego County

This is great advice. I'd also like to pay you a compliment. I like the way that you turn a 'rant' into an informative blog post. I'm not a fan of true rants, and I do not think they have a place on AR.

Feb 28, 2010 12:36 AM

Melissa, thank you very much for the honor of a compliment from a true blogger! By "rant", I think you mean "complaint", and I do complain a lot!! But as you saw, I try to figure out a way to turn my frustration into a learning opportunity and teach it to my fellow colleagues... I love teaching, but only to those who are truly interesting in learning.

Feb 28, 2010 12:00 PM

Lise Howe

Keller Williams Capital Properties - Washington, DC

Assoc. Broker in DC, MD, VA and attorney in DC

Regina - this was a very well presented and well written post. I like the idea of having the seller write to the effect that they are rejecting the offer so it is clear that it is not the listing agent's decision.

Mar 02, 2010 02:08 PM

Lisa, Yes I agree that is a good business policy, to have the seller sign the "rejection" paragraph. If later you have to go to court, how can you prove that they really did see the offer & authorize the rejection of said offer? Unfortunately some bad agents try to "control" the offers & transactions and DO NOT EVEN PRESENT the offer to the seller! Or else they call the seller and give them only minimal details about the transaction. For example, "Hello Mr. Seller, we just received a low-ball offer that I'm sure the bank won't approve, you don't want to accept it, do you." That is scary that agents would attempt to make the decisions on behalf of their clients!!

Regina brown

Mar 04, 2010 10:36 AM

Realtors®: When should you REJECT an Offer? QUIZ TIME!!

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