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To tell or not to tell that is the question

What is a REALTOR'S responsibility when it comes to multiple offers?

On either side of the transaction as a REALTOR we have a certain set of obligations to our clients and another set to the other agent.

I read the post Unethical, Illegal or Acceptable and this Buyer's Agent was concerned with the listing agent's conduct after an offer was presented in writing BUT then further negotiated and accepted verbally. Her and her buyer were taken aback when in the interim another, maybe higher maybe better, offer was presented and signed to before this agent could get the paperwork with the deposit over to be signed.

What we need to remember is that the fiduciary duty the listing agent has is to the SELLER....NOT to the agent or the other buyer.

This is not and should not be taken as a personal issue between the agents. The seller was fortunate enough to receive another offer and for whatever reason the seller thought it was better for them than the prior offer and this one was in their face ready to be signed (unlike the other one) and had it's escrow deposit in the right hands - not the buyers or buyers agent hands- hence we get a fully executed contract.

What agents have to remember as well, as listing agents we are NOT, I repeat NOT, required to tell the buyer's agent when we are in the situation of multiple offers.

As a REALTOR (which I am and which is why I added the logo) we are only required to disclose the presence of other (not signed and accepted) offers with the Seller's permission!

When we take listings (at least when I do) I go over with them the possibility of multiple offers and how they can be handled. At all times as long as it is legal I MUST follow their instructions. It is not always in my clients best interest to disclose the existence of another offer being negotiated on, as it may cause the buyer to freak and run. I do not get a blanket statement approval or disapproval on multiple offer disclosures I let them decide when and or if to tell.

This is their home this is their decision!

I come across many a buyer's agent that I actually have to forward the Code of Ethics to when it comes to this issue. Now that we are in the market of Short Sales having multiple offers on properties is commonplace so this misunderstanding of process and procedure is happening with greater frequency.

Seller's need to understand what their rights and obligations are - After an Offer to Purchase has been signed WE MUST DISCLOSE; when they are being negotiated it is your right to CHOOSE WHEN AND OR IF TO DISCLOSE.

Bobbie Files
Your Bristol and Plymouth County Realtor

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Posted by Bobbie Files Realtor® Berkley, Greater Taunton Homes for Sale on 12/07/2008 09:56 PM

Comments (30)

Multiple Offers in the ActiveRain Channel

berkley ma, berkley ma real estate, bristol county real estate, bobbie files, code of ethics, keller williams realty

30 Comments on To tell or not to tell that is the question

DEC

All of this confusion could be avoided if:

1. Agents would take responsibility for their own performance.

2. Not rely on verbal anything past "Hello".

3. The selling agent needs to better prepare the buyer for the necessity of "getting off the pot", when making offers/counters/accepting, etc.

I am of the opinion that when an agent loses a contract and begins the blame game, that has nothing to do with that particular real estate transaction, but is a personality trait.

Lenn - You should trademark that as the "1,2,3's of Realtors"!!

Bobby Lenn covered this topic well in her comments. I always find it interesting when another agent takes it personally or does not take responsibility if they were not gettting their clients to sign the paperwork. You hit the nail on the head and sending the code of ethics must clam them up real quick:)

Bill - The next thing that gets me is the commission game with Buyer's Agents!! I really wonder sometimes if agents actually get ANY training on their job!

As with anything else in this business...until its in writing, it means nothing. No negotiation is final unless it's in a contract. Letting buyers and sellers alike know that time is of the essence and that we must get it in writing before someone else does is crucial.

You never have a deal in real estate until the contract is fully executed. You should act quickly to get that contract executed.

If it isn't in writing then it is just a discussion and not a contract. While the buyers are thinking it over the seller can and will look at any other offers. If a better one comes along so be it. We do have the option on our contracts to have the seller say whether we can disclose other offers but not the details of those offers.

Keisha and Carol - That is really it. PERIOD. But the attitide and mouth you get from the agent who unfortunately didn't act with the urgency he or she should have gets to be a bit much!!

Cindy - I like that position "If it isn't in writing it is just a discussion." Honestly, Iam going to start using it. THANKS!!!!!

Bobbie, the Buyer's Agent needs to educate their client as to the importance of acting quickly. Until a contract is ratified, it is just an offer and nothing else. Great post!

Hi Bobbie!
You make an excellent point and conveyed it very well. I am chair of our grievance committee for our local real estate association. We get complaints often from Realtors that simply rely on "gut reaction" and what is "fair". They forget about what is legal and binding. Even the listing Realtor may not want to accept another offer, but they must only consider the one that is in writing. As was pointed out, anything else is a discussion. The agent who wrote the other blog truly did their clients a disservice when they didn't follow the proper procedure for writing and negotiating an offer.

Great blog, thanks for sharing.

Bobbie- I found out a long time ago that verbal offers and acceptance aren't for real estate. I must admit that I found out the hard way, but I only needed the lesson once to figure it out. Now if I'm the buyers agent you bet your butt we submit all offer and counters in writing.

Been there, done that. What really surprises me is when veteran agents seem to forget that "if it's not in writing it's a discussion, not a contract". Good to remember.

Some real estate offices I have worked in had inner office rules on how to handle multiple offers & had a form to follow filing in what happened once an offer came in plus made sure a seller had an understanding what their rights were. But no system is perfect. Until an offer was fully executed, another could slip in that was in the best interest of the seller to accept. - Carla

Good advice for listing agents, Bobbie. We should always do what is best for our client, and in the case of disclosing multiple offers or terms of an offer, only with the seller's permission.

I understand the verbal offer/discussion idea that it is worthless. However, if and when we do have an offer in writing and 30 minutes later another buyers agent wants to bring an offer or does bring an offer, ARE WE NOT at that point obligated to tell them that we are in a multiple offer situation and they need to make their best offer??? Maybe each state is different. I hope I'm not showing my ignorance, but I want to learn if I'm wrong. I thought you were supposed to then present all offers to the seller at the same time (if possible) and then the seller picks ONE to work with (counter or accept) and then contact the other buyers agents and tell them,"thanks for your offer, but my seller has chosen to work with a different offer." Please let me know.

Today doing verbal and not putting in writing is asking for trouble then you must have both parties

to sign.

DEC

Jeff and Lisa - You are absolutely not showing your ignorance. It is better to question than to assume. You are ONLY required to tell about an offer if it is signed accepted, not verbally accepted. You need, in fact MUST, get the seller's permission to disclose any other active (unsigned) offers. With buyers being as jittery as they are these days it may not be in the seller's best interest to disclose the presence of the other offers. And they can negotiate with any one or all of them. But for your protection I would keep detailed and accurate time stamped notes.

I haven't read the other blog that is referred to but am responding to your statement about the listing agent having a fiduciary responsibility to the seller. in Florida, most agents are "Transaction Brokers" and as such do NOT have a fiduciary responsibility to their clients.

We are required to deal honestly and fairly and use skill, care, and diligence in the transaction. This allows us to serve both sellers and buyers in the same transaction. When we are representing both seller and buyer, as transaction brokers we are bound to limited confidentiality and may not represent the interests of one party to the detriment of the other.

We consider multiple offers to be a good thing for the seller as they normally drive up the selling price. We don't disclose the amount of the other offers, but let each buyer know that there is another offer on the table and they should make their best offer.

Colleen - In Massachusetts we can be Seller's Agents, Buyer's Agents, Dual - Disclosed Agents, or a Facilitator. As a Facilitator in a sale we act more like Transaction Brokers as you are indicating in which we do not have a fiduciary responsiblity to either party. That is not the most common form of Agency Relationship in our area. Typically we have the Seller's Agent and than the Buyer's Agent with Dual Disclosed happening fairly frequently as well. But even as a Transaction Broker or a Facilitator the deal is not done until it is signed and another deal could come forward and be presented and signed prior to the original getting signed.

In florida we have to disclose , disclose and disclose some more...I liked your point and it opened my eyes to a side i normally wouldn't have thought of...Great Blog

I too have had many verbally accepted offers in the past in multi offer situations that another buyer came forward with a better offer prior to written acceptance of the previous offer. Now, it is hard to have to call the buyer's agent back and say, sorry a better offer came in prior to you presenting your offer, but it is in my sellers best interest to accept this new offer. They are made and you are right, I too have had to forward the code of ethics to them and point out who I work for.

Great post and I understand the buyer's agents point of view, but they need to understand ours as well. I usually tell people just present the offer and forget the verbal and then we don't have to worry about it, if we accept it, we accept it immediately and none of this verbal stuff and leaving a chance for another offer to arrive before you present your offer. (15-6)

Bobbie, I commented on the other post as well, and while it is critical to get the offers and counteroffers in writing, the real focus is what you said in your post. IT IS THE SELLER'S DECISION WHETHER OR NOT TO DISCLOSE ANOTHER OFFER. This is what I hear so often when I call to make an appt to show someone's listing,"You'd better be quick because we have an offer" Now, it's possible the agent had permission to disclose, but I doubt it. When following your policy which is also my policy, I have had the other very angry agent tell me that I am the unethical one. I don't think so.

Reminds me of the old People's Court with judge Wampner and Doug Liewelyn. At the end of every show his comment was, "If it is not in writing and signed by both parties it is not a contract."

It does not matter which state verbal real estate transactions are brought forth, they have no clout.

it is always more safe to just get or present offers in writing and avoid the conversation, it just leads to miscommunication in the future , selective memory is what I like to call it

I definitely agree with you. It is ultimatly always the sellers decision. Thanks for sharing that with us. Have a great day!

Stating intentions in writing, seems to be the key.

We, as in my contracts state that we won't discuss verbal offers period. They are not worth the paper they are not written on.

We are quite lucky in Texas as agents can contact an agent directly and stop a counter offer in its tracks as it is considered notification. I have had double and triple offers where we have agreed in terms, my seller countered....and a better offer came in. We can merely contact the other agent and verbally cancel the counter offer....then accept the latter. Obviously we follow up in writing, but it is a great means to protect our sellers.

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