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54 Comments on Interpreting the Code of Ethics
The key wording would be "with the sellers permission" - very clear wording. Good luck in this situation.
I guess I dont understand why a seller would not WANT to disclose the amount of an existing offer. If you go to an auction, you know exactly what the highest bid is which often times drives the sales price up even more. I learned that from Ebay...many things sell for way over what they should sell for, even when they're used.
But I also understand it's very important to stand behind your client's wishes as long as they are ethical. I'll be watching to see the true "ethics" behind disclosing the offer amount.
Interesting. I was always told that this part of the code refers to where the offer came from not what the terms were. I suppose that if we disclosed that the offer came through the listing agent or another agent in the listing agent's company (an agent of the same Broker) there might be a chance that the net to seller could be different depending on the commission arrangement negotiated by the seller and listing agent. The MLS (MRIS, in our case) had a field to disclose "variable commission" to alert cooperating agents that a net to seller may be affected.
My clients always instruct me never to disclose terms. What they heck good is that?
I guess this is a good problem to have. Multiple offers! Is the market coming back?
Great job. So many agents assume the attorney is always right. You handled this perfectly and I look forward to your next post.
I am impressed with that some are taking the side of having to disclose. I believe, as you and so many others, that the disclosure is not required but obviously there is room for disagreement even in the Code. Keep up the good fight.
Patricia,
You are the real thing...an agent who truly protects the interests of their Seller. When I list a property and establish that relationship, I take it seriously and do not/would not give out ANY information without permission from the Seller - especially about other pending offers.
The other point is this: I find that instructors say many things in order to both inform and entertain their captive audiences. The more controversial their information, the more their name is brought up, the more people will hear of them and sign up for their courses.
I recently sat through a course during which the instructor told the group that a good Buyer's representative would insist that the Seller move out of the house BEFORE closing so the Buyer could be assured of taking delivery of the house in good condition. Personally, I think that is NUTS! And, it is bad advice. It is not normal and customary to expect a Seller to vacate a property when he hasn't received a dime for it. It isn't even good common sense.
On the other hand, he said a good Seller's agent would make certain the Sellers did not move out of the house before closing...thereby setting up a huge debate in the local market about who is the better agent....the agent for the Seller who advises them not to move until the property is closed or the agent for the buyer who advises the Buyer not to enter into the contract if the Seller won't move? What a mess!
But, the instructor is coming back in a few weeks and his class is full.
Oh well..............You know what they say, "Those who can, sell. Those who can't sell, teach." ( No offense to the hundreds of wonderful instructors out there who do a creditable job. It's just that the ones like the attorney Patricia is dealing with give you all a bad name.
There are plenty of terrible agents giving the rest of us wonderful ones a bad name, too. Happens in every profession except maybe the legal field.....:)
That's nuts. From the beginning, I always treat me clients how I would want to be treated. Would I want my agent telling someone else about my offer. No.
I think every situation is different depending on who you represent. It is up to your client.
I've been in some mustiple offer situations and here's what happened. I was representing the Buyer. The Listing Agent informed all Buyers it was a multiple offer situation and gave each Buyer a deadline to make "Highest and Best" Offer. I thought it was totally ethical and fair.
Patricia, !!
You made lots of great points here. Many that I needed more clarification on...thanks for your .2!
In California, the purchase agreement has a paragraph in BOLD stating that the offer is NOT confidential. Even so, it is my understanding that the seller must give their permission to disclose. I'd guess that most sellers do not tell their agent to disclose price and terms of existing offers. When representing a buyer, I always ASk and am surprised by the number of listing agents that actually tell me! Somehow I doubt the obtained permission to do so.
"...with the sellers’ approval..."
That verbiage stands out to me.
On the flip side, does the buyer agent have to disclose the existence of other offers, and their respective price and terms, made by the buyer on other properties? I suspect the answer is no, as that would not be in their interests.
Pat, Great blog entry as usual. I just had a CE class today and definitely raised my eyebrows over one or two statements made by the instructor in passing that seemed to not jive with what we've been taught and practice, so its definitely a good lesson not to take things at face value, but to follow up on your own to make certain you're adhering to the law and code of ethics.
Many have commented that divulging the terms of an existing offer to a potential buyer is counter to the Sellers' best interest. I whole-heartedly agree. But, in addition, it also puts the Realtor in the position of not treating all parties with fairness and honesty (another ethics requirement). Why? Because now the potential buyer who has yet to submit an offer has vital information that will guide their offer that the initial offering buyer did not have. Is that treating the first offering buyer fairly? Is there any way you can level the playing field for the original offering buyer? From that original buyer's perspective, probably not.
Do you sometimes feel as if you are constantly being tested by other agents and their brokers. I have also interpreted that sentence just as you have. I can disclose that their is an offer but not the details of that offer. Now I'm going to follow up and get confirmation from my clients that those are their instructions.
I wonder if the attorney giving the advice would share his strategy with opposing counsel in a law suit. Probably not. This sparked a lot of discussion, thanks.
That's the most ridiculous thing I've ever heard of!!! You HAVE to tell them what the other offer is?? I don't think so!!!
Dan
Amazing...
Key words: "with the sellers' approval." Absent that, you simply can't disclose!
So what happened? Did that lawyer ever get back to you? I have been taught and I have interpreted the code as you have - - existence ok to divulge; terms not ok to divulge. Also, it wouldn't seem that the seller's approval would be enough -- wouldn't you also have to get approval to divulge terms from the buyer who made the offer? It's their terms you are divulging.
This is interesting. I always do what my clients wants...usually divulge the existence of other offers, but it has never occurred to me that we would divulge the terms. Although someone made a good point--wouldn't divulging the terms possibly bring the best results for your client? This is a Pandora's Box since I also believe in maintaining good relations with local agents (who would be very unhappy to have their offer terms shared with the competition). I will be following this one, too!
Huh? It is the way it reads. You have a contract with the Seller. It's amazing what people can read into a simple clean statement "with the Seller's approval" Some attorneys just have too much time on their hands
This has gotten a lot of discussion. I think REALTORS do really know what they are doing. Following the wishes of the client certainly takes precedence over what we want to do. With the seller's permission you can disclose anything that is confidential. And if I have that permission, I make sure I have it in writing. But usually I advise my seller to let me disclose only the existance of an offer, meaning a real offer in hand, and not all the rest of the terms. I want the buyers to give their best shot based on their qualifications and not fabricate their price that would cause a fall thru later.
The second point I want to make is the confidentiality statement that someone mentioned. Remember, that if you ask for the terms in your offer to remain confidential between those parties and you write that in your offer, that's all it is, is a request, because the offer has not been agreed to by the seller. SO if you think you want the offer to be condidential, then you need to get a confidentiality agreement signed first, before you submit your real offer.
Let us know if the attorney ever sends you anything.
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