Can a Real Estate Agent Refuse to Submit an Offer, and Under What Circumstances ?

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Education & Training with (retired) TN LIC# 290452

                               refuse

Can a real estate or buyer's agent refuse to submit an offer, and under what circumstances would they do such a thing ?

Is it ethical ? And when ?

Here are a few reasons that I've heard that agents will refuse to submit offers to purchase real estate.
(Caution: Don't try these at home)

1. The agent wonders how he or she will get paid if they submit an offer that includes no earnest money.

2. They agent doesn't understand the offer the buyer wants to make because the agent doesn't consider the buyer's decision a normal way of presenting an offer.

3. The agent considers that their buyer is attempting to buy the property with nothing down and plays 'Devil's Advocate' with some mercenary thought that they need to protect the seller and advise the seller not to accept their buyer's offer.
(Man, is this unethical or what !!!??)

4. The buyer's agent tells the buyer that the seller has already turned down more than the buyer is offering in an attempt to get the buyer to up the ante'.

5. The buyer's agent says, "Ok, I'll submit the offer but I'm going to advise the seller not to accept it".
Man is this flirting with disaster, or does the agent have an ethical responsibility to protect the financial interests of the seller as well ?

There's much to consider here, and so many ethically challenging events taking place, that all of the above appear to be in the red zone.

In the state of Tennessee the law is clear.
Under Part 4 of the Rules and Regulations of the Tennessee Real Estate Commission:

62-13-404. Duty owed to licensee's client. - Any licensee who acts as
an agent in a transaction regulated by the Tennessee Real Estate Broker
License Act of 1973 owes to such licensee's client in that transaction the
following duties, to:

(1) Obey all lawful instructions of the client when such instructions are
within the scope of the agency agreement between licensee and licensee's
client;

(2) Be loyal to the interests of the client. A licensee must place the interests
of the client before all others in negotiation of a transaction and in other
activities, except where such loyalty duty would violate licensee's duties to a
customer under § 62-13-402 or a licensee's duties to another client in a dual
agency;.....

That's why I wonder what an agents ethical responsibility would be under example 5 . Help us with this one legal eagles !!!

What are the thoughts and experiences of our great Active Rain community ?

 

Posted by



David Saks



Time&Temp Memphis

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Rainer
15,914
Claudia Efthimos
Signature Homes & Estates - Morgan Hill, CA
GRI,SFR,ASP,SRES

I just had a similar expierience where a foreclosure listing stated in the remarks there were 34 offers. Many points in the description  remarks were not clear. And it said the bank would make a desision in July. It was now the middle of August. So I called the agent to find out if they had made a decision as the listing was still Active status. The agent told me they did in deed have 34 offers & had not made a decision, but "They Were No Longer Accepting Offers." I sent the listing to the MLS & asked "If an Agent MUST present all offers" how can they refuse them if the listing is not Pending? I have not received a response. Has any one else had a similar expierience?

 

Aug 30, 2008 05:45 PM #1
Rainmaker
1,570,124
David Saks
(retired) - Memphis, TN

Maybe the client told the agent not to accept any more offers, Claudia ? You might want to review the real estate commission rules and regulations in your state to consider what is applicable regarding active and pending and the permissibility of the offer during any phase of the listing status. Great to hear from you.

Aug 30, 2008 05:55 PM #2
Rainmaker
49,381
Michelle Roethle
Windermere Peninsula Properties - Belfair, WA
Your NorthWest "Real Estate Solution"

I would always submit the offer. If the agent won't present it let it be on them, not you.I would keep my client up to speed on the time lines, and the other agent's response.I would like to hear what the MLS says in your state Claudia. I am going to check with mine.

Aug 30, 2008 06:05 PM #3
Rainer
15,914
Claudia Efthimos
Signature Homes & Estates - Morgan Hill, CA
GRI,SFR,ASP,SRES

David: It was a Foreclosure. The Client was the Bank

Aug 30, 2008 07:15 PM #4
Rainmaker
1,570,124
David Saks
(retired) - Memphis, TN

I know, Claudia. I should've said 'bank' instead of 'client' although in this case they're the same thing. If an REO is the issue maybe the bank has the right to refuse any more offers, and then again, maybe not.

The Tennessee Real Estate Commission states:

Commission's Rules state:

62-13-404. Duty owed to licensee's client. -

Any licensee who acts as an agent in a transaction regulated by the Tennessee Real Estate Broker License Act of 1973 owes to such licensee's client in that transaction the following duties, to:

(1) Obey all lawful instructions of the client when such instructions are within the scope of the agency agreement between licensee and licensee's client;

(2) Be loyal to the interests of the client. A licensee must place the interests of the client before all others in negotiation of a transaction and in other activities, except where such loyalty duty would violate licensee's duties to a customer under § 62-13-402 or a licensee's duties to another client in a dual agency; and

(3)(A).................(ii) Receiving all offers and counter offers and forwarding them promptly to the client;

Specifically paragraph (3)(A)....(ii)Receiving all offers and counter offers and forwarding them promptly to the client....

So, in this case, in my state, the offer has to be forwarded to the client.

Submit an inquiry to your real estate commission and see how they respond and what codes are applicable. Whether or not the bank has an obligation to review the offer you present, I couldn't say.

These are really good question that you've conjured up. Thanks.

Aug 31, 2008 03:33 PM #6
Anonymous
sprucesquad

This is a fantastic site and very engaging too. Excellent work!

Dec 14, 2010 01:47 AM #7
Rainmaker
1,570,124
David Saks
(retired) - Memphis, TN

Thanks Spruce. Have a sugar cookie for the nice comment.

Dec 15, 2010 07:07 PM #8
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