RECO's Terminology About Offers

RECO’s terminology with respect to Offers

RECO deals with the issues of:

1)    Existence

2)    Made

3)    Communication

4)    Received, and

5)    Presented.

No Offer actually exists unless it is in writing and it is signed. At this point, the Offer has been created. It exists. A registrant can refer to it. In the context of the legislation, this Offer has been “made”.

When we deal with the next step, there is a slight potential for confusion. A Buyer’s representative may now call and advise that he has an Offer. However, until there is some written evidence of that communication, it’s just like it was never made.

So, the next step would be to have the Buyer’s representative send a text, email, fax or written note to the Listing Brokerage confirming that there is such an Offer. Now, one further step is required. The written communication of the existence of the Offer must be accompanied by satisfactory evidence that it is from a registrant. In that regard it could state “John Smith, Sales Representative, ABC Realty Inc., Brokerage.” That identification would be sufficient in the circumstances.

At this point, the Offer is “received” within the meaning of the legislation.

Received in this context is NOT the contractual expression. It is a regulatory expression. We are looking to determine those Offers which exist, and those Offers which do not exist. These ones exist. They are now to be included in the count.

The Listing Brokerage must advise competing buyers of the number of Offers. If there is no identification, there is no Offer which is “received”. If there is no written communication, no Offer has been “received”. It’s as simple as that!

Remember, at this point, the Listing Brokerage has not seen the Offer.

There was a term or expression in the industry, namely “registration”. Specifically, the Regulator has chosen not to use that term. Registration by a Listing Brokerage included both Offers and expressions of interest. These expressions of interest were the fall-back position for phantom Offers. As a result, these are to be avoided.

The term to be used will be “received” rather than “registered”.

The next step is “presented” when it comes to the Regulator. Did the Offer ever get to the point that it was presented? Yes or No? It doesn’t really matter what time the presentation took place. Clearly, there must have been a real Offer, if it got “presented”.

This presentation relates to the transfer or delivery of the Offer into the possession of the Seller for the purposes of disposition. It could be accepted or rejected. If it were rejected, it could either be countered or simply abandoned. You will appreciate that at this point, the terminology is coincident with contract law.