An agent's fiduciary duty is to his client.  As long as the client doesn't ask for something illegal, my understanding is that we're obliged to follow the direction of the client even if we don't necessarily agree with the client.  Of course, one always has the choice to drop the client and cease representation.

I know the listing agent is obliged to present any and all offers but I'm not sure whether a Letter of Intent qualifies.

Thanks for a thought provoking post!

I'm unsure what a letter intent is or how binding it would be - we us an offer to purchase and contract.

I really don't see this as an ethical issue.

Need more information.

Good luck

One thing for sure, intentions are not the same as a contract.  I share feedback with my sellers which includes opinions, comments and often good intentions from the prospective buyer, but until I have a contract in hand to present, it doesn't count for anything more than good or bad intentions,comments, feedback, etc.

I believe a letter of intent is to be used to see if there is any negotiating room without going into formal contract.  Since a letter of intent is basically no more than a verbal offer, I think it is ethical for the buyer to put in as many as they want.  I heard of someone recently putting in about 30 of them on properties on the market 150 days  or more.  He said he received 6 counters and ended up buying 2-3 properties. 

If your seller has an interest, counter verbally.  If not ignore it. Just let your seller know it is not a legimate offer until a contract is writtien and value in given (ie escrow monies). If your seller receives a written offer that is better, he can negoitiate it and forget about the letter of intent.  Of course as soon as he counters a legimate offer, the letter of intent is null and void

PS I like the dragon

I don't have the answer but I wanted to see the comments you get so I can learn about this sort of situation.  Thanks for putting it out to the rainers for their thoughts.  I always learn something on this site each and every day.

Donald, I didn't know either but came on to read some of the responses.  This wasn't a question I had seen before.

Donna Yates, Georgia Real Estate North Georgia Blue Ridge Mountains:

Thanks for checking in Donna

Linda Tremblay, Bucks County Real Estate:

Linda:  As always, you have some good comments.  I thank you for your input here.

Don

Dallas Chambers:

hmmm.  THanks for your feedback Dallas!

Don Price:

Thanks Don.  I see by all the comments here that you are right.

I get the incomplete contract for $100,000 below anything reasonable that comes through the fax.  This guy sends them to 100s of properties here.  I guess if he gets one it is worth it.

That is very creative, is it wrong? I'm not sure how I feel about it. I will ask you when I get into the office which listing that is, or do I know?

Thanks Michele.

Randy L. Prothero - Hawaii REALTOR®

Thanks Randy.  I guess you are right

Hi Donald, the investor is "fishing". It is a tactic that is taught at investor seminars to purchase a property as cheap as possible. I would check your RE laws on it.

Keith and Robin:  Thanks  I believe you are correct on that one

Ethical and Legal are not the same--obviously. Legal maybe; Ethical--- HIGHLY questionable. Who knows for sure or is it state by state or only if you get caught is it legal and/or ethical. Interesting Post. 

Thanks Jim Willis:  The agent made it clear the buyer could only purchase 1 property, but they put out "BIDS" on 6 properties.

I've submitted more than one intents for investors.  Like you said, they are lowballs, but if we get a bite, the offer is then presented via an actual offer.  Its not unethical. Its a fishing game.  The owner can play or not.  The owner should at least counter the offer contingient upon Proof of Funds and written contracts.  If the buyer cannot produce that, then you know its not a legit offer. 

But unethical?  No.  Its like saying its unethical to advertise " I will sell your home" and the listing does not sale.   You said you could sell it, and it did not sale.  Does that make you a liar or unethical?  I think not.  It's your foot in the door for a listing.  Well letter of intents are a foor in the door as well.  It reduces alot of paperwork. 

Chad Baird:

I've submitted more than one intents for investors.  Like you said, they are lowballs, but if we get a bite, the offer is then presented via an actual offer.  Its not unethical. Its a fishing game.  The owner can play or not.  The owner should at least counter the offer contingient upon Proof of Funds and written contracts.  If the buyer cannot produce that, then you know its not a legit offer. 

But unethical?  No.  Its like saying its unethical to advertise " I will sell your home" and the listing does not sale.   You said you could sell it, and it did not sale.  Does that make you a liar or unethical?  I think not.  It's your foot in the door for a listing.  Well letter of intents are a foor in the door as well.  It reduces alot of paperwork. 

 

Thanks Chad.  This is a great comment.  Thanks so much