Liar, liar pants on fire. Not me!!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

I don’t know about you but I love things in multiple. Multiple zeros on my bank balance, multiple listings, multiple closings and of course, multiple offers. Multiple offers, are one of my favorite things. It really places my Seller in the driver’s seat when it comes to negotiating and normally means we will be able to get a higher price for the house. What I don’t like, is a common misconception, from Realtors, that I have to disclose multiple offers to them. Or, that I have to disclose the existence of any offers to them, whether received or not. Sometimes they expect this before they even show the property. I have even been accused of being “unethical” for not disclosing an offer. So first, let me make something perfectly clear, offers, whether one, or multiple, are nobody’s business but my Seller’s and mine. How we choose to handle the negotiations or disclosure is 100% my Seller’s choice.

Now just in case you don’t believe this, here are the articles from our Code of Ethics that state what I have to disclose:

Standard of Practice 1-15

REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/06))

Standard of Practice 3-6

REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation. (Adopted 5/86, Amended 1/04)

Accepted offer, means, a pending contract. Florida law is quiet on this issue, as it should be. Negotiations are not dictated by State laws. And I’m sure you State’s laws are quiet on this as well.

So that leaves us with, how do we handle multiple offers? Well, I am sure there are many ways, but here are a few examples of the way I do it and that seem to be quite common in my area. I will be curious to hear how they are handled in your area.

  • Notify all Realtors/Buyers of multiple offers and request “highest and best” by a certain day and time. This technique is used quite a bit in my area, especially on bank owned properties. It is a pretty good way to weed out the lookers and concentrate on the serious buyers. Works best when you have numerous offers. Once they have submitted “highest and best”, the Seller can pick one that is acceptable, choose one or more to continue negotiating with or set another day and time and ask for “highest and best” again. Repeat until there is an acceptable offer. I’ve been the Buyer, on several foreclosures, where this technique was used and frankly, I ended up paying more than I wanted for the property. It turns into a competition and I hate losing. So this method definitely works.  
  •  Don’t disclose the existence of other offers, pick one and try to negotiate it. If you can’t, pick another one and do the same. The problem with this technique is it may take a few days to negotiate on one contract and while you are doing this the other one may withdraw their offer. Not one of my favorites but can work if you are already negotiating when the second offer comes in.
  • Don’t disclose and negotiate all offers at the same time. I actually have done this many times. The key though is to make sure the Seller does not sign the counters. If they do, and the Buyer accepts it and signs, then you have an accepted offer and the game is over. This can be a good technique if all the offers are pretty close in price and all the Buyers are equally qualified. Then it is just a matter of who responds the fastest(motivation). You don’t disclose, because then they would all respond quickly. You want their motivation to be, that they are anxious to purchase, not that they are anxious to beat out the others.
  • Disclose the existence of other offers and the amount of the offers. Play them against each other. Let them know they are competing and if you want this property you will have to beat the offer, or offers, I have on the table. Continue until only one is left. Hopefully it will be way over list price by this time. I used this technique during the boom time, so many times I can’t count them. Very successful way to negotiate.

It is very important, that how ever you want to negotiate multiple offers, it is your Seller’s choice, not yours. Do not disclose multiple offers to another Realtor with out the permission of the Seller. After all, it is his deal not yours. So there you have it. I hope this helps. I am by no means an expert on this but I really do love multiple offers.

So next time a Realtor ask you this, “Do you have any offers on this property” try this “I’m sorry, that’s confidential information but as we speak, this property is still actively on the market".

Liar, liar pant’s on fire. Not me!!

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Comments (39)

Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty
Live by the Code, Love the Code, Spread the Code....
Oct 19, 2006 03:06 PM
Carole Cohen
Howard Hanna Cleveland City Office - Cleveland, OH
Realtor, ePRO

Multiple zeros are okay as long as another number preceeds them!

Our law states that the Seller has a choice to disclose that or not. Clear and simple. Slightly nerve wracking but still clear.  Great discussion on this.

Oct 19, 2006 03:48 PM
Eddy Martinez
Nationwide Funding Group - Highland Park, CA
Bryant you did everything by the book , people always try and find something negative out of something.
Oct 19, 2006 04:24 PM
Nima Rezvan CT Lender CT Senior Mortgage Broker
Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT
First Time Home Buyer Expert - CT FHA Loans - FHA
Bryant is the man!  Go Bryant!  Gotta love the picture too!  Where do you find these funny pictures?
Oct 19, 2006 05:01 PM
Lisa Dunn
Edina Realty - Minneapolis, MN
www.TwinCitySeller.com
This is broker-specific in Minnesota.  My Broker's policy is to disclose multiple offers.  I discuss this with the seller, the pros and cons, and if they prefer NOT to disclose, or want to reserve that right, we simply put it in writing at the time of listing. Not a bad thing to talk about in a listing presentation....because your comptetiion isn't!
Oct 19, 2006 10:07 PM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Tony: Need the code...Baby...Need the code!

Oct 19, 2006 10:36 PM
Sharon Simms
Coastal Properties Group International - Christie's International - Saint Petersburg, FL
St. Petersburg FL - CRS CIPS CLHMS RSPS
Definitely it's the seller's option. Nonetheless, the sellers need to know the pros and cons of each approach - which is part of the services we provide.
Oct 19, 2006 11:04 PM
Dave Rosenmarkle
Highland Realty, Inc - Arlington, VA
33 years of providing fully satisfying service!

Bryant

As always, great post. I fully support the notion of, whenever possible, keeping the seller in the driver's seat. Sometimes it's necessary to clarify the purchaser's motivation before making the decision to accept his/her offer. No point accepting the highest offer if you sense or otherwise determine a particular purchaser is less likely to close. I have had bid/auction situations over the years where well-intentioned, excited purchasers bid up the price, were designated primary offeror, ratified the contract and then spent the next two weeks trying to get out from the contract. 

That would be a good problem to have to wrestle with in our current market..... 

Oct 20, 2006 12:14 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Stan, I have actualy recieved offers like that before on my listings. I tell me Sellers to lets just negotiate it as we choose. I always concentrate on getting the stress out of a deal so the seller can make a sound decision. If the buyer withdraws their offer, them so be it. My thoughts on this are I would rather have a buyer withdraw at the beginning than 2 weeks into a deal. We are always trying to establish how motivated the buyer is.
Oct 20, 2006 12:20 AM
Derek and Mariana Wagner
The Artisan Group- Keller Williams Premier Realty - Colorado Springs, CO
The Artisan Group - Colorado Springs REALTORS®
We get permission (or not permission- but that's never happened) at time of listing contract to disclose "Well, we are looking at another offer, but would like to see what you have." should multiple interest appear at the same time.
Oct 20, 2006 01:57 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

I tend to take disclosing or not disclosing on an per offer basis. It really just depends on the offers and how close they are to what we are trying to get. As for buyers being upset, so be it, I don't work for the buyers I work for the sellers. The buyer's concerns do not concern me at all.  Negotiations to me, are to get my seller the best price with the most qualified buyer. It's business. As you can tell from my post and comments, emotions do not play apart in my negotiating strategies.

This is one of the reasons I avoid being on both sides of the transaction. I do not want to know the buyers.

Oct 20, 2006 02:57 AM
Christine Forgione
1 - Whitestone, NY
Associate Broker

Ohh man.. late to the party.. I am sorry!!

In the State of NY You absolutly can not disclose the amount of the offers - even after the home closes in sales - you can not go back and say the other offers were.. x and xyz. 

You can ask if there are offers on a property - but I never answer a yes or no.. Listen some agents say "there are offers on this home - you need to have your buyers come up to X amount of dollars to beat them out"  are they telling the truth?? maybe -  maybe not - but they should NOT be saying that.  EVER.

I have agents ask me "whats the final price"? I always respond to that with "well we are asking LMNO  So go from there.  I did not put a price on it for no reason.  DUH!"   

Good topic Bryant..

Oct 20, 2006 03:01 AM
Susan Trombley
Trombley Real Estate - Wake Forest, NC
Broker/Realtor, Raleigh, Cary, Wake Forest, Youngs

When I am on the buying side. I ask the listing agent if there are other offers on the table. Usually they will say yea or na. Only once have I had bring your best offer and that was on a foreclosure. I have not discussed price.

Oct 20, 2006 03:26 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Disclosure, in any State, is totally up to the Seller. The Realtor, in any State, cannot disclose without their permission. And for goodness sake don't ever tell anyone what price the house is pending at. What if the deal falls through? Try negotiating with a buyer that already knows what the previous contract price was for, you have already played your card and will have a hard time taking it back. 

It is soooooooo important that Realtors understand these things. Do NOT, under any circumstances, divulge your Seller's or Buyer's info without their permission. So watch those interoffice deals.

Oct 20, 2006 03:35 AM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living
I've been on both sides of the fence, having submitted an offer where others were present and having received multiple offers on behalf of my sellers.  It can be tricky and intimidating at first but it's also a matter of organization and logic.  Playing buyers against each other worked well in our hot market but right now with prices declining, I feel that it could backfire to disclose that other offers may exist (and the amount) because buyers get the feeling that they are being pushed and possibly pushed away.  It might be better timing to disclose (with sellers permission) when the seller decides to counter.
Oct 20, 2006 04:37 AM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL
DUH...That's my line! Geez.
Oct 20, 2006 04:58 AM
Christine Adler
FindAHomeWithMe.com - Fort Lauderdale, FL
SE Palm Beach, Broward & NE Miami-Dade Counties FL

I have done all of these over the years. You have to judge the property, seller and the other agents. One thing I did find out from the FL legal hotline is that it is legal to tell the other agents. You are disclosing this to get your buyer the best price to get one to bid against the other and that is acting in the best interest of your customer.

Oct 21, 2006 01:57 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Christine, Regardless of what the legal hot line says, it is against our code of ethics to disclose anything related to an offer or the fact that you have multiples without the sellers permission. There is nothing wrong with telling IF the seller says you can. If the legal hot line said you could disclose this without the sellers permission, then they are dead wrong and should not be giving our erroneous information. 

BTW if you are working in an agency capacity and divulge this info without the sellers permission then you have just broken agency laws.

The easiest way to remember this is NEVER release information without your seller or buyer's permission

Oct 21, 2006 04:38 AM
John Rogers
Century 21 APD - El Paso, TX
I think some Realtors are afraid of multiple offers because if their clients offer isn't the one picked, They might blame the realtor. I've beem blamed for far less in my life.
Oct 26, 2006 10:17 PM
Tracy Santrock
Santrock Realty Group Inc. , - Cary, NC
Raleigh - Cary Broker

Glad we followed the playbook today.  I co-listed a property with a top agent in my office and we ended up w/3 offers in 4 days! Not bad in a buyers market.

Aug 31, 2008 02:54 PM