Sellers: I Must Present All Offers. Even When You are Sale Pending
I am speaking about the state of Iowa here. All offers must be written, so no verbal offers or contracts because they are not enforceable. No matter how ridiculous the offer may be, I may know with every part of me that you will reject it, but I still must present it to you.
Why? Because I cannot filter what you see. You must have the opportunity to make those decisions for yourself. If I don't present an offer to you because I think that it isn't worth your time, there will be no rejection to send back to the buyers showing that you saw their offer.
Think about that. If a buyer writes many lowball offers, just to see if any of them stick, and agents refused to present them, the buyer could have a case....in Iowa.
Yes, as ridiculous as it sounds, even if you accepted an offer weeks ago and the buyer has already released all the inspections and the appraisal, I must present an offer to you. You cannot accept it as anything other than a back up offer, but you can reject it and let the buyer see that you were the one that made that decision in writing.
This rule has only bitten me once. I had a new listing on the market and after about a week on the market, I had a cash offer. Not full price, but really good with no inspections or appraisal contingency. Problem was that the time frame for response was just a few hours. It was a now or never offer for the seller. There had been another agent that had expressed to me that her buyer was very interested and would be writing an offer as well. So I tried my best to get that offer in the time frame as well. No response from the other agent. So of course the seller decided to accept the cash offer from the only buyer that gave us an offer. The seller was happy until 3 days later.
The second buyer decided that they wanted to write a back up offer. Here is the problem, it wasn't cash, but it was full price with the normal contingencies, inspections, appraisal, etc. The seller was infuriated. They screamed at me and wanted my head on a stake. They called my broker and wanted out of the first offer. But there were no contingencies for the first buyer and there was no way out of the first offer. Plus the first buyer really did want the house. That is why they didn't ask for inspections or an appraisal.
The rest of the escrow period was a nightmare. Prior to listing their home, they had offered on their new home....with me. So I could not stay away when I was selling them a new home and selling their old one. They were so unpleasant to me, that I was not present for either of the closings.
But ultimately, at the end of the day, it was their decision to accept the first offer and they knew it. Because it WAS the ONLY offer at the time! I didn't have a crystal ball and it was just easier to blame me. They saw me repeatedly call the second agent. They heard me call the first agent and beg for more time to respond. But the first buyer wanted an answer right away, time was not on the seller's side.
Presenting all offers up to the day of closing seems like a silly thing, but sometimes it makes sense to sellers to accept back up offers. They can use them as leverage to get the first buyer to stay on track. But when it back fires, it is usually not pretty! Like in my example.
Funny story....the new home that those sellers bought like 6 years ago from me, has been on sale with three different agents and companies over the last year. I showed it to a buyer once last year. I knew too much about the house and my buyer knew the owners and didn't like them. I was so relieved that I didn't have to deal with them again...now that would have been ugly.