Multiple Offers and the Code of Ethics in Ann Arbor

By
Real Estate Broker/Owner with Missy Caulk TEAM

home for sale in ann arbor, missy caulk teamMultiple Offers and the Realtors Code of Ethics

There are 17 Articles in the Realtor Code of Ethics, and each of those are broken down into three divisions. You can read the entire Realtor Code of Ethics here.

  • Duty to Clients and Customer's 
  • Duty to Public
  • Duty to other Realtors 

Article 1 of the Code of Ethics

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)

Within each Article are Standards of Practice

Standard of Practice 1-6

  • REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)

I interprete this to mean you can not hold onto one buyers offer "while you wait" for another offer to come in.

Quickly means quickly.

A client is someone you have a contractual relationship with, a customer is someone you are helping with your services but have not signed a Listing Contract with or a Buyer Agency Contract with.

The Code requires us to promote and protect OUR CLIENTS best interest

Being honest and fair to all parties and other Realtors is part of the Code of Ethics of Realtors. Let all parties know up front what your plan is in a multiple offer situation.

As Realtors working with Sellers and Buyers the ultimate decision is up to them, we can advise them, show the data to them, but do not in any situation make decisions for them.

Multiple Offers

Today the Ann Arbor area Board of Realtors sent out a email on this to remind Ann Arbor Realtors, how to handle multiple offers. We are seeing so many homes with multiple offers. My TEAM submitted some offers where the listing agent told us she would not present until "after the open house."

We have seen some Brokerage's holding their listings until an offer comes in from an agent in their own brokerage. Our MLS in Ann Arbor rules in Ann Arbor allow for 2 days before the listing has to be made public. In a tight market this is allowing for companies to sell their own listings.

One of my buyer agents has been going out to the homes the minute they come on the market and doing an IChat with her buyers, then writing the offer...sight unseen. It is working as she got 4 under contract last week that way. Crazy out there.

If you are thinking of listing your home, now is a great time to do so, which the demand for homes in Ann Arbor is up due to the low inventory. 

Posted by

 

Missy Caulk, Ann Arbor Realtor

Missy Caulk, Broker/Owner of Savvy Realty Group can be reached at 734-926-9797 or email: Missy@MissyCaulk.com

Our Team of 6 agents are available to help you relocate to Ann Arbor, Saline, Dexter, Chelsea, Milan, Ypsilanti Township, Clinton, Manchester, Whitmore Lake, or throughout Washtenaw County, MI.

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Rainer
172,756
Marc McMaster
RE/MAX Centre Realty - State College, PA
Putting my clients before myself

Many times I've instructed sellers to wait until another offer comes in.  If an agent is holding it and not telling the seller thats one thing. Waiting for additional offers on a hot property with the sellers consent is completely ethical and the right thing to do for your client. 

Apr 29, 2013 12:30 PM #89
Ambassador
3,630,062
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Missy, the custom here is to include something on the MRIS comments like:  "Any offers will be presented on Tuesday, April 30th at 5:00 pm."  So if someone sends in a preemptive offer over the weekend, the listing agent will usually present it to the sellers, or will hold onto it if that's what the sellers instruct them to do.  It can get really interesting if the preemptive offer has a deadline for acceptance.

Apr 29, 2013 12:41 PM #90
Rainer
251,711
Virtual Realty Consultants
Virtual Realty Consultants LLC - Wellesley, MA
Making the American Dream a Reality
I think many of you are missing the point here. It is simply NOT acceptable to hold back offers unless you have written instructions to do so from your seller client. Even then, if an offer is presented, you still must give your seller client a chance to respond. A case in point is the agent who thinks he or she is clever and writes in the MLS "all offers to be reviewed on Saturday". If today is Tuesday and my buyer wants their offer to be considered by Wednesday, you have no option but to present my client's offer immediately. The other thing that really gets my goat is when I hear "we have several offers on the table", when in fact you have none. This is another violation of the COE and sooner or later someone is going to get caught - like the agent who told a co worker of mine that there were other offers on their listing and the attorney for the buyer who happened to contact the seller directly (without the knowledge of either agent) to discuss another matter. Remarkably, the seller fired his agent, agreed to enter into a separate agreement with the buyer and ended up compensating my friend directly by means of a facilitation fee and told the other guy to try to sue him for a commission when he hadn't even realized that he used the wrong listing forms to start with!
Apr 29, 2013 12:47 PM #91
Rainmaker
876,976
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN
My practice is to clearly write in the private remarks for realtors, " as per seller instructions, all offers to be presented on XXX date and responded to by XXX date." Agents know up front that we are giving everyone a fair chance and the seller can then review all offers. It's worked very well.
Apr 29, 2013 01:31 PM #92
Rainmaker
629,431
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

It's a similar market in our area.  Tough for buyers for sure.  We as agents still need to act in our clients best interests but legally and ethically. -Kasey

Apr 29, 2013 01:35 PM #93
Rainer
28,324
Sonya Mays, MBA
Midwest Executive Realty - Milwaukee, WI
Broker/Owner, Greater Milwaukee

Missy, thanks for a great article! It is very timely and very appropriate with all the multiple bidding situations across the globe. Unfortunately, we see a lot of questionable, unethical activity and this is a solid reminder of the ethics code and best practices for our industry. Some professionals think that if it's legal then it's ok to get away with. But just because it's legal doesn't make it ethical. Eventually those trying to hide behind the curtain will get caught and possibly lose their license and their legal ability to practice. From what I'm seeing, it's not just newer Realtors but some of the more seasoned veterans as well. So I hope that Realtor education and training, both pre-licensing to continuing education, will aggressively incorporate ethical and professional standards of practice as mandatory criteria. 

Apr 29, 2013 01:47 PM #94
Rainer
17,742
John Bonnett
Baird & Warner - Barrington, IL

Missy, your post is timely and well written.  That's obvious by observing the number of comments it has garnered.  Thank you for bringing this timely subject out of the closet. 

We were recently beat out of a $300,000 sale because the listing agent held the offer for a friend.  Our offer was the top one until the last day.  Citing the Code of Ethics is one thing, enforcing it is another.  We found no one particularly interested in our case and we chose not to invest in large legal fees to prove a point.

For those agents who desire to be ethical and also effective in handling multiple offers, I recommend reading chapter 11 (Negotiating When There Are Multiple offers) of Tim Burrell's best-selling book, "Creating a Great Deal . . . The Art of Real Estate Negotiating."  Brian Buffini says it is the best book on the subject available today. It makes a mountain of sense, but those who insist on double-dipping will spurn it.  However, those who desire to build a reputation of trustworthiness and client service will embrace it.

Thanks again for bringing this timely subject to the forefront.

 

Apr 29, 2013 01:56 PM #95
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

I read comments and couploe of times ran into "deadline for acceptance", but in the market you describe it is useless. The Buyer threatens that he would walk away? In multiple offer situation, who loses? Yep, the buyer

Apr 29, 2013 04:07 PM #96
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Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

Missy, good to see your back on Campus. We have missed you. 

Apr 30, 2013 08:14 AM #97
Rainmaker
299,891
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate
Missy~As agents for "the other side," we never know if the co-op agent is actually following their client's orders. The handling of multiple offers is no different on that count than any other deal. You are completely correct when you say that it is a matter of ethics. What many agents consider "fairness" takes a back seat, however, when a client's best interests and/or instructions are involved.
Apr 30, 2013 11:39 AM #98
Rainer
56,732
Bryan Tobiason
Keller Williams Partners, Inc. - Gardner, KS

We have an agent here in town who ALWAYS asks to present their buyers offer to the sellers.  They say this way it insures that their buyers offer is presented properly and the listing agent isn't fluffing another offer above theirs. Of course that doesn't work on REO deals, but it may not be a bad idea in general.  So far I've had pretty good luck getting offers accepted, but I have had several buyers who've lost out miserably by calling an imaginary bluff. 

Apr 30, 2013 11:42 PM #99
Rainer
88,486
Christopher Campa
LONG & FOSTER REAL ESTATE - Gainesville, VA
Northern VA Realtor

Missy, thanks for focusing on this, its important for agents to follow the code.  Here in Norther Virginia we are experiencing multiple offers also. 

I'm originally from MI.  Went to MSU, but was really disappointed when UM lost the BBall Championship.

May 01, 2013 12:32 AM #100
Rainer
78,797
Michael Ford
San Diego, CA
California+Hawaii+Oregon

regrettably, the realtor code of ethics exists because there are many unethical persons attracted to the trade.  i wish it wasn't true.  what other trade (except lawyers) has such a peristent reference to their code of ethics?   not contractors, insurance agents, car salesmen...

we all know the agents that game the system and until they are made the topic of a formal complaint they will persist in their practices.  it has gotten so bad in the areas i work in that i do very little buyer business as it is too frustrating...i simply am not willing to jump through hoops as a less than honorable agent plays me off against his own buyer.

that said, if a seller, in concert with their agent, wishes to wait for additional or better offers or encourage a bidding war...it's their property and their perfect right to do so.  who wouldn't?

 

May 01, 2013 02:42 AM #101
Rainmaker
374,941
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Sometimes the Code of Ethics has contradictory prescriptions--just like the US Constitution does.  It's not black and white.   In your example, Missy, a seller may say that presenting offers too soon--before the home has full market exposure--does not "promote the interests" of the seller, and therefore is not in compliance with Article 1.  I view the problem as the listing agent not informing cooperating agents what the rules are for that listing in the MLS confidential remarks.  That way a cooperating agent can either work on, or not work on, that listing.

May 01, 2013 03:12 AM #102
Rainer
84,187
Brad Baylor
ERA Coup Agency - Milton, PA

Missy - Whenever I'm working in a multiple offer situation, I try to talk my clients into writing an escalation clause, usually $100 above the highest offer (if there's wasnt the highest,) not to exceed a specific amount.  This has worked for my clients on 3 separate occasions.

May 04, 2013 12:02 AM #103
Ambassador
918,697
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Brad, I do that too, some agents won't accept them or present them.

Michael Ford, no problem with that but the buyer agents NEED to be informed that the sellers want to wait. Don't leave us hanging with no response, text, email etc...

Liz, you got it. 

Frank, hi my friend

HI Chris, thanks for cheering for us. I root for MSU when not playing, of course we both know others who hate so much and do not. 

John, sorry that happened, we see it here to, you can file a compaint with Grievance you know. NO legal fees. 

May 04, 2013 12:35 AM #104
Rainer
177,450
David Evans
RE/MAX TOWN AND COUNTRY - Cumming, GA
HUD NLB Cumming GA

It is true that listing are contracting but unless they are cash deals are they selling??? Appraisals are still a major problem and demand is exceeding the value, just try and explain that to your seller who sold their house with 10 offers in one hour on market... LOL! Strange days indeed! ;)

May 05, 2013 03:12 AM #105
Rainmaker
518,571
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Missy,

 

It is clear that you have touched a nerve. In this market, buyers have a mighty challenge in trying to win the multiple offer competition. Sellers and their agents are in charge whether buyers and their agents like it or not. As a listing agent, one does not have to act unethically to be successful and to represent the seller’s best interests. If the listing agent is thinking of their own pocket book instead of their client’s best interests then screwing the buyers and their agents is second nature and ethics are irrelevant to them.

May 07, 2013 02:32 PM #106
Rainmaker
493,703
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

It's a dogfight out there. But you learn to do it right and that way you wont get nipped in the butt. Protect your client BUT do it ethically as well.

Oct 08, 2013 01:11 AM #107
Rainmaker
2,881,434
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

IF the Seller's strategy is to wait until a certain point in time to review and respond to offers, that is their right, but they must put that instruction to the listing broker in writing or the listing broker can be in deep ****** for not having that in black and white. That said, Sellers are completely free to revise those written instructions at any time, and potentially select an offer in advance of their previously published time frame.

Sep 18, 2015 08:02 AM #108
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