Feb 10, 2009
What part of "present all offers" eludes you?
10 Feb 2009
Posted by VAR
We’re a Team – Get over it!
I’ve said in posts over and over again, that one of the failings of the real estate industry, is that we forget that at the core of what we do, is a buyer who wish to buy and a seller who wishes to sell and everything else is ego. Too many agents try too hard to be "in charge" of the transaction and fail to do the most basic of services that they are hired to do. In the past week I have been approached by agents on seven different occasions regarding a listing agent’s blatant refusal to present an offer to the Seller. Each of those occasions, the listing agent was not a member of our local association, but had listings in the region.
In one case the agent (using cursing to stress his point) declined to present an offer because the listing said as-is, and the buyer wished to make it contingent on a home inspection. Another declined to present because the offer price was $10,000 less than asking. Unbelievable. Stop being afraid of the client and present the offers! Anytime that I hear an agent refusing to present, I have to assume that the agent wasn’t professional enough to educate their clients to the current economic realities and that buyers are trying to be in control. The MLS is an offer of terms, but the Offer to Purchase is a counter to the advertisement.
Present ALL Offers
Unless you’re a Universal Agent or General Agent with expressed direction to decline offers on behalf of your client, you are not able to use your discretion as to what will and will not be delivered.
Here is Virginia Statuate: 54.1-2131. Licensees engaged by sellers
A. A licensee engaged by a seller shall:
2. Promote the interests of the seller by:
c. Receiving and presenting in a timely manner written offers and counteroffers to and from the seller and purchasers, even when the property is already subject to a contract of sale; and
Here is what the REALTOR® Code of Ethics states:
Standard of Practice 1-6
REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
Standard of Practice 1-7
When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/93)
These requirements do not state that the offer has to meet the listing agent’s approval, nor does it state what format the offer needs to be in. There is no "required" contract format. All offers have to be presented, even if on a napkin. Whereas the Virginia code section actually specifies "written" offers, the Code of Ethics compels us to present "all" offers, which could include oral offers or even letters of intent. There are some basic elements that make an offer to purchase, but that’s a post for a different time.
What’s a buyer to do?
Almost as daunting as this issue of listing agents not presenting the offer to purchase, is the arrogance of agents declining to write offers. Prior to entering into an agency relationship (either the ostensible or expressed) the consumer is a customer and is not due certain levels of skill. However, once they are a "client" you have obligations. Those obligations compel you to write all offers that are lawful, at the order of client. This is where obedience comes in.
54.1-2132. Licensees engaged by buyers
A. A licensee engaged by a buyer shall:
2. Promote the interests of the buyer by:
b. Assisting in the drafting and negotiating of offers and counteroffers, amendments, and addenda to the real estate contract pursuant to § 54.1-2101.1 and in establishing strategies for accomplishing the buyer’s objectives;
Note my emphasis on the "buyer’s objectives" not your objective as a practitioner trying to obtain a higher commission, by offering a higher price, or "saving face" with the opposing agent. You were hired to carry out the client’s wishes and attempting to obtain a property at the lowest price possible, is almost always on the buyer’s priority list!
Still not convinced? Ok, what does the REALTOR® Code of Ethics say about this?
Standard of Practice 1-8
REALTORS® , acting as agents or brokers of buyers/tenants, shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated. (Adopted 1/93, Amended 1/99)
Look, I don’t know how much clearer I can make it. If the seller doesn’t wish to see offers that don’t meet certain criteria, get it in writing and PROFESSIONALLY explain to the Selling Agent that your client has rejected this type of offer. Any offer in this market is a good way to start the conversation that may lead to a closed transaction. If for no other reason than enlightened self interest, present all offers and treat ALL agents and clients with respect and professionalism. It’s simply what the client hired you to do.
If you’re a Selling Agent who doesn’t write "lowball offers" you’re compelled to explain that policy to the consumer before they enter into the agency agreement, otherwise your committed.
If you encounter an agent declining to present offers, copy this post and get their Broker involved. Almost always, we find that the Broker’s involvement remedy’s the issue much quicker.