Bidding Wars- Unethical???

It sounds like the other agent just didn't want to deal with it.  He had an offer, he was content, he was done!

Bidding wars are not unethical at all, simply trying to get the best possible outcome for your client. Hopefully the listing agent really did present your offer to the sellers! Not knowing the intimate details of the other offer, there could be several reasons why they accepted it. It could have been a cash offer (unlikely, but possible), they could have offered a quicker closing, they might have been in a stronger financial position, waived inspections (again unlikely, but possible), etc etc. Bottom line is, the listing agent could have come back to you asking for highest and best, but didn't. You could have advised your client to offer their highest and best from the get go to put them in the best position to have their offer accepted, but you didn't. Unfortunate, but hey, everyone makes mistakes. Live and learn, and best of luck on your next deal!

I have to defend Odelia here, I wouldn't have been surprised at all by her buyers low offer if I were the seller or seller's agent.  Buyer's today are looking for deals, because they can get them.  Its a buyers market - right?

The seller's agent should've presented the 2nd offer, regardless of how high or low it was compared to the 1st one.  The seller gets to make the decision if they want to consider it or not, the listing agent doesn't get to make that call.

As some already mentioned, I think the listing agent was just being lazy and didn't want to deal with it anymore, so he gave a lame excuse to be done with it. 

Let's get this straight...

1. the listing agent isn't selling the home, the seller is. The listing agent is only facilitating the terms of the listing contract.

2. A seller has every right to accept lower offers if they choose to- even against the listing agent's recommendation, and even in the face of higher offers that are on the table.

3. Buyers agents should express to their clients that they should leave nothing on the table for further negotiation if they truly like the house. If they really had more gas in the gas tank as you mentioned, then they should have competed to win the race, not to just finish 2nd or 3rd.

When clients are hesitant to write the full amount they are comfortable with, I always comment- "Are you willing to lose the house over X amount of dollars. If you are , then let's write at this amount, but if you are not, then let's write the higher offer- knowing that you gave it your best shot."

Highest and best is the way to go! I had clients this past week who offered full price and cash with no contingencies and closing in less than 30 days. All the listing agent said to me when he called to turn down our offer was that we were beat substantially. Here in Cape Coral, FL. I'm actually not shocked. This market is going crazy...again!

I am a listing agent, and in a nutshell: Do not expect a counter.  Period. I am seeing more and more sellers NOT counter.  Give your highest and best offer.  If an agent tells me they can "go higher," I relay that to the seller along with my opinion that if they could go higher then they should have - ESPECIALLY if they knew there were multiple offers. 

Not all sellers want to play the counter game and they can accept or reject any offer they choose, for whatever reason they choose.  We also don't owe the selling agent an explanation as to why they didn't receive a counter - it is not mandated that the seller counter you.  My response to buyer's agents who ask why is: if you could have negotiated a counter, then you could have offered higher to begin with.

I think it is a disservice to the buyer to not advise them to give their highest and best, especially if they really love the property.  If they love it that much, they wouldn't have risked losing it.  The value of the house is what it is worth to the buyer, so how could they have overpaid?

He may or may not have been short sighted.  He should have shown both offers to the seller.  Sometimes if you get a bidding war going you may end up with nothing.  I bird in the hand is better than two in the bush.  I probably would have tried to set both buyers against each other and drive the price, but it is the sellers decision.

Sounds like the listing agent might have had something at stake - like both sides of the transaction.

I'd like to hear about how many agents are actually using the escalation clause. I know you can add in that the seller must prove there are higher offers, but how do you prevent your buyers' offer from being escalated by offers from unqualified buyers?  That is a very valid point that someone brought up here that I had not previously considered.

In San Diego, on reasonably priced properties we are easily seeing 10 competing offers (our inventory is really low right now).  Usually the seller will do a single round of a multiple-offer counter asking for everyone's the highest and best offer.

To Jenny, my wife frequently uses the escalation clause.  Only once has an agent attempted to pull a stunt and claim a higher offer than they could prove.  In terms of unqualified buyers causing the price to increase, yes, an interesting risk.  Of course, few (good) buyer's agents will let their clients waste time making offers that they are unqualified to be making.

Odelia - First off (I read in your comments) congrats to you and your client on being under contract on a better home !  That is super.  My wife Stephanie always says "if it is meant to be, it is meant to be".  I guess that is the big picture in this market that if the buyer does not get the first property, there are more out there !  Secondly, I do think this could have been handled better by the listing agent.  I would have asked for a "sellers reply to multiple offers" or some sort of proof that my offer was presented.  Perhaps the other deal was cash or conventnional 50 percent down ?  Either way, that is why I use those "sellers reply to multiple offers" in these situations.  Many of our listings recently have had multiple offers.  Maybe the old days are slowly coming back ?  ~  Chris

In the end, the perfect home shows up. I learned from my dad a long time ago, if it is meant to be it comes easy. It is about faith in our creator, god, divine, universe, whatever you believe in.

I think it was in poor taste to use the company name of the listing agent personally in the post.  BUT, if you KNEW there was another offer and still wrote the one that you did for your buyers, WHY ARE YOU MAD?  You had a good chance to trump the other offer and you blew it.  You had a bidding war and you didn't like how it turned out!  What you wanted was for the seller to refuse both offers and then go back to you?  You had an advantage here and you blew it I think.  You knew about the other offer, wonder if the others buyers knew about yours?

Just my 2cents on that.

Lyn I get what you are saying, but here where I am located there are multiple independent Re/Max offices, and  without given the individual offices name, it really does not identify anyone.   And everyone knows that the largert an organization gets the more likely there will be a few bad apples.  Although I do think this should have been a members only post

If I know that there are 1 or more existing offers, I tell my clients to write an offer that will buy them the house and live with the offer that they write. If their offer is the best, they get the house. It was not too high, it BOUGHT THE HOUSE! If it was too low, live with that fact. It was your decision, buyer. If you could not go higher, I understand. If you did not chose to go higher, I understand (but why...didn't you want the house?).

So, Odelia, why were you surprised when you did not get a counter offer? You already knew the agent did not want to deal with you.

John Juarez

Wow Odelia. I do not want that Agent selling MY home.

I hope this agents seller doesn't read your blog, because if they do, they maybe in court and they will see that it is not only not unethical, but that it is in the best interest of the seller to get the highest and best price for their home.

The Texas Real Estate Commission has advised Texas agents that esculation clauses are not to be used.