On Presenting the Washington State Purchase and Sale Agreement
In every state, laws have been enacted to help the public move through life with a regard for the accepted way of completing certain transactions. Some procedures have been found so damaging to the public interest that they have been made illegal. The real estate industry is guided by many such laws.
Some industries, like real estate, have practitioners who form groups, like the REALTORS®, which have devised stricter guidelines in the form of what we call our Code of Ethics. From the Preamble to the National Association of Realtors® Code of Ethics:
In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession
Where this Code of Ethics and state or national law conflict, the obligations of the law must take precedence.
Over the past decade we have moved through a housing bubble and a bust. Strange and unusual practices and techniques have developed. I follow many news groups and blog sites concerning the real estate industry and one particular practice that has arisen before and is here again, is one which is bothersome for me.
Agents sometimes lose sight of the scope of their obligations.
Sellers sometimes give instructions that agents shouldn’t follow.
Buyers sometimes make demands that agents don’t want to follow.
For example: Between 2004 and 2007 many offers were grossly in excess of the asking price, and were often accompanied by other concessions from the buyer and/or buyer’s agent to make the deal more likely to favor that particular buyer. In most cases, this is merely an indication of how much the buyer wanted to buy the property.
But, I’ve been reading lately, where buyers are offering “side deals” to owners selling short, to cover moving expenses, and bonuses to listing agents for stronger consideration of their offer among the many, if there are multiple offers.
This appears to be the same thing as above, but in the case of a short sale, it is a matter of defrauding the bank. If the value of the property to a buyer is the price on the purchase and sale agreement, plus the moving expenses gift, plus the agent bonus, shouldn’t all of that money be applied to the mortgage? I’m not a advocate for the banking industry. But I am an advocate for following state and federal laws and the REALTOR® Code of Ethics.
As an agent, I know that, in Washington, all written offers must be presented to the seller. Failure to do so may be breaking a law. It is not my place, as a listing agent, to tell a buyer’s agent not to write an offer because the seller won’t go that low.
As a seller, (including banks, but they do it all of the time) to demand certain restrictions on offers, or to say that you don’t want to see them unless certain conditions are met, is asking your agent to break a law. Just accept delivery of them and counter them, or not, as you see fit.
As a buyer, you have a right to offer any price you want for a property. And, if you have an agency agreement with a real estate licensee, that agent should forward your wishes. That’s reasonable. Please don’t ask your agent to do anything illegal.
As always, I am not an attorney. I am a REALTOR®. Creative real estate practices by everyone from Main Street to Wall Street got us in trouble over these past few years. Let’s not be too creative once again in our zeal for recovery or personal profit.