What part of "present all offers" eludes you?

We’re a Team – Get over it!

certificate

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.


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24 Responses to What part of "present all offers" eludes you?

  1. Jim Duncan says:

    Matthew –

    Nice reminder about what we should be doing. One question I would pose to each of these “offendees”:

    Did they report the offending agent to DPOR or file a Code of Ethics complaint? Did they at least talk with the offender’s Broker in Charge?

    If not,

    1) they have no business complaining.
    2) they’re as culpable as the offender.

    Complaining accomplishes little other than reinforce what many of us (and the public) already believe – some agents are neither competent nor professional.

    There is a (admittedly wildly inefficient) policing system in place of which we need to take advantage.

  2. David says:

    I can work w/ some agents, but there are many I can not work w/ because of the attitude you are talking about.

    In a potential distress situation (the seller is facing foreclosure) I have had more agents harm the seller by not taking offers to the seller, then help. This under the sentiment “I am just trying to represent my client”

  3. yes present all offers. If your client gets upset, just have them sign NO and initial next to that on the proposal.

    As to not wanting to write certain offers for real estate buyers, well that is just plain stupid. You just never know what can be negotiated. Recently I was able to take a low-ball offer and bring the buyer up to within 3% of the current list price on a home, which was acceptable to the seller. You just never know.

  4. I find myself ranting about the same subject you are. I don’t know why it’s so hard to understand “present all offers”. I find it frustrating that I have to deal with “professionals” who follow the same guidelines and ethics that I do but don’t “present all offers”.

  5. Monika says:

    I don’t get why some agents think they can make decisions for their clients. The liability alone would scare me off…never mind going through the compliant process.
    We just finished a transaction where the Co-broker kept making decisions for his client without ever asking the client. Pretty well admitted it and had to be pushed into asking his client about an extension. It was unreal!

  6. Realtors are not salesmen/saleswomen. We are here to provide the most accurate picture and information so that out client can make an accurate decision based on the information provided. If they make the wrong decision based on accurate information, it is their fault. Making my own decisions is tough enough. It is just stupidity to try and help make others choices too. Who says we would be correct any way? Let the buyer decide as he or she is the one that has to live with the decision.

  7. I like to leave the decision up to my clients. I take them every offer no matter what. I feel better at night about the transaction. I also know that I provided my clients the most information possible.

  8. As realtors our goal is to provide all the information to the client but they should take the decision, if we force their decision in one way or another that might come back in the future if our clients regret of what they have done.

  9. Jim Rake says:

    Matthew – yes, it can be a frustrating business. Hmmmm…you think maybe if we held our “profession” to a higher standard, we’d get better practitioners?
    Monika, perhaps the answer to your question, “I don’t get why some agents think they can make decisions for their clients”, might just be a combination of agent’s not appreciating their ethical responsibilities, and clients who “don’t know what they don’t know”.

  10. Chris Malone says:

    This industry is dominated by incompetent part timers because that’s the business model that works for the big firms- get as many licensees as possible. A trained chimp can pass the licensing exam and continuing education is a joke. You can do it online in about 45 minutes. THIS IS HOW THE VAR AND NAR WANT IT. IF THEY REALLY WANTED HIGHER STANDARDS, WE’D HAVE THEM.

    The Realtor associations are simply lobbyists for the new homes industry, the mortgage lenders and the regional and national brokerages that depend upon the volume. We, as Realtors are greatly to blame (or at least complicit) for our current market meltdown caused by too much supply and undisciplined lending and zoning regulations.

    I have yet to hear one person in a leadership capacity in the NAR or VAR step up and say anything remotely along the lines of, we take some responsibility for the current state of affairs. We owe the American public (who we pretend to represent) an apology for our greed and double dealing.

  11. Ernie says:

    In a Short Sale Situation, are you still going to continue presenting all other inferior contracts even if two or three far superior offers are already sitting at Sellers table waiting for a decision?

    In the short sale package of one of the better known settlement agents here suggests choose and send only the best offer to the bank?

    Does this “present all offers” provide any exemption or you are allowed to use your common sense afterall.

    Just want to learn.

    Thanks.

  12. Chris,

    There are a number of opportunities to get involved and help lead your Association. If you’d like contact information on how to get involved and work toward the improvements you’d like to see you can e-mail scott@varealtor.com and I’m sure they would be happy to get you plugged in to work toward these resolutions.

    It’s easy to rage against the machine, it takes more to really create change. I’m sure that leadership would be happy to hear the solutions that you have to offer.

  13. Chris Malone says:

    Matt,

    They’re not interested. I have tried for years to talk to my local association about the Realtors’ always fighting on behalf of lax zoning regs, lax lending regs, appraisal practices, etc. In other words, lobbying for the big business interests. Name a preservation effort or a protective zoning effort that might benefit a neighborhood or small homeowners group that the Realtors have ever supported. Can you? And it’s all in the name of “property rights”. When they were looking for bloggers, I offered to blog. The said we’ll get back to you. I never heard back from them. They don’t want to hear dissenting voices and frankly you and I both know that if the Realtor organizations did not hold a monopoly on lockbox access, the membership would be halved immediately.
    It’s a waste of money for most agents, especially these days.

    Let’s face it, the Realtor organizations are just a business like any other and they are protecting their interests. It masquerades as some sort of public service group, bringing ethics, fair housing practices etc. to the business. It’s nonsense. That’s what laws, personal integrity and the VREB are for. The NAR and the state and local ARs are about getting PAC money to protect the residential development industry.

    Hate to be so cynical but let me guess. You’re an officer in an association or work for VAR?

    Best,

    Chris

  14. Chris,

    I am formally a Broker, who recently went to work for my local association as the Education Director / Instructor. I believed and still do in the Association, warts and all. My experience with the Association was VERY different than yours.

    I’ve seen it work hard for consumer issues, property rights, affordable housing and recently green sustainable living. I’ve been very open of my criticism when the association is wrong, but for the most part felt that working from within was better than yelling from without.

    There are a great many barriers to work through for the Realtor Association and it’s a constant battle.

  15. Ernie,

    The “Show all offers” is unwaivering. Unless the Seller directs you to only present certain offers, you must present all.

    The fact that it’s a short sale does not change the laws of the code of ethics….

  16. Chris Malone says:

    Matt,

    I appreciate your candid and calm responses to my rants.

    And you’re right, working from within is really the way to go versus simply complaining. That said I’ve been a broker for the past 20 years in Northern Va. Over those years I have tried to change some minds but have failed. Really, and I say this without bitterness, it is a simple fact that residential real estate has gone the way of just about every other industry in this country and it is about large companies and franchises and their need for volume. The little guy is simply not on the radar screen for the NAR because we do not pay their rent. (And they have a nice building.) They do the bidding of the big companies.

    If there is anyone out there interested in jumping ship, I’d be happy to meet with them. (Thank you, VAR, for this forum.)

  17. Chris,

    I’ve been known to rant a bit myself :)

    I respect the opinion of someone who has spent 20 years in the trenches. I’ve seen the current generation of Association leadership and staffers working hard to get where you are looking to go, in a lot of ways. It’s a huge ship and rarely does it make sudden adjustments. I can’t speak for NVAR or NAR, as I am not involved there, but this forum is a prime example of VAR’s efforts to reach the member, regardless of company size and to give a voice to everyone to share with their peers.

    This is one visible sign of internal workings. Our local association is also trying very hard to bring about some improvements in education and consumer-practitioner interaction. It’s important to remember that all of these associations are ran by brokers and agents just like you. Getting your peers to buy-in is very important. Get the right group together and you’ll see the improvements your desiring. You can also contact me off topic if you’d like to discuss in more detail, the efforts being made to serve agents and consumers. Matthew@Realtor.com or Ben Martin at VAR ben-at-varealtor.com

  18. Doug Ford says:

    Well I don’t know if a chimp can really pass the licensing exam and continuing education. When I took that test only roughly 45% passed the first time. Then the broker you work for probably weeds out alot of people you never see. Sure some agent need more education, but the majority of us should be taking responsibility for junior agents and helping them out. We should be ashamed of ourselves if WE allow a part-timer or new agent to make a Really Big mistake that can’t be retracted or repaired by hie/her broker.

  19. Lem Marshall says:

    Ernie:

    Even if the short-sale payoff lender is already reviewing an offer, the listing firm should continue to present all offers. The Code of Ethics, the Virginia Code and the REB regulations all require it.

    But the listing firm should do so anyway. For one thing, I will contest your premise. You say the offers under consideration by the lender are “far superior” but how do you know this to be true? The price might be higher, but what about the creditworthiness of the buyer, the settlement date, the simple likelihood of a successful closing? There are so many things that go into determining whether one offer is superior to another that we should leave that decision to the lender — or at least not deny the lender the opportunity to know of the alternatives. Present the offers. If they are in fact inferior, the lender will dispense with them. If not, you’ll be glad you did.

    Above all, whatever your feelings about a wasted effort of presenting inferior offers, don’t admit that you hold offers. REB will make a St. Stephen out of you if they learn of it.

  20. “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.” (excerpt from above)

    Let me play devil’s advocate here and take the statement “present all offers” to an extreme, but logical conclusion — If we state that *all* offers must be presented, then we’re talking about all verbal offers too, right? A verbal offer isn’t enforceable, and in 99% of cases is not serious.

    If real estate agents are obligated by law or Code of Ethics to present ALL offers, no matter the form the offer takes, then I can think of a scary new way for agents/brokers to use overseas call centers to overwhelm the time of their competition.

    Just because some drunk guy stumbles out of a bar and offers to buy the building across the street that I happen to represent for $500 (or $5M), and then promptly passes out doesn’t mean that should be considered a serious offer.

    Let me make myself clear here that I agree with not making the decision for your client, but there has to be some standard for the definition of an offer that must be presented. I personally would lean towards anything in writing (including LOIs).

  21. Sharon Kelley says:

    “Present all offers” – exactly. This is such a timely blog. I mainly represent buyers and it seems things are getting worst when it comes to working with listing agents that flat out refuses to submit an offer. Recently, I was told, “It a short-sale, I’m only going to present my client with one offer. I’ll hold your offer as a backup and call you if the other falls through.” Yes, I was extremely outraged and quickly reminded the listing agent, to no avail, that as Realtors ® we must present all offers. Again, the agent stated my client’s offer will only be a backup, and suggested we keep looking. The arrogant, unprofessional attitude and language caused me to believe this wasn’t the first occurrence.This trend needs to stop, and stop immediately. It’s extremely hard to work with agents that blatantly refuse to abide by the same Code of Ethics and laws I must and will to obey.

  22. Jim Duncan says:

    Sharon –

    A quick question – what was the result of the Ethics hearing?

  23. Nathan,

    I suppose the core opposition I have to your comment is the argument of the spirit of the law versus the letter of the law. In this case, I think that the letter and spirit are the same.

    If the agent can’t tell the difference between a drunk’s utterance and someone making an offer, we have bigger issues. But that aside, I would tell my client “Some poor guy whom I think was drunk offered you $500 on your 5 million dollar home” There – now I delivered the offer and got one more opportunity to connect with my client.

    If I call and say, I have a client who is interested in offering 4.7 million on your 5 million dollar listing, but he really wants to know if your client is interested before he writes. Would you call your client and let him know? I would certainly hope so. If you were the seller, would you want to know? I would think you would – especially in this market.

    The issue here is that Realtors swore to uphold the Code of Ethics, which compels you present the oral offer. If you don’t like it, get involved to get it changed – but until it is changed, follow the code.

    You referenced that oral offers aren’t valid. Actually they are valid, but not enforceable. I can shake your hand and agree to buy your home, we can go to closing and transfer deed. So, your handshake could be good enough – however if you defaulted no one would hear your complaint.

    I’ve closed more than one transaction where the offer started off with “Before we put this in writing, my client would like to know if….”

    Also, the offer may not be the full context of the agreement. If I call you and ask if you’re clients would consider a 90 day closing, wouldn’t one think that the seller would like to make that decision and not want the agent to withhold that “offer of terms” from them?

    As to your argument about the call center being used as tools to present false offers – there are rules against that as well and if the nefarious agent has nothing better to do with their time and money, than that’s a risk that is taken when you get in the business.

  24. Matt-

    Thank you for the well thought-out response you gave.

    I can’t think of a time when I haven’t passed along an offer, verbal or otherwise. In fact, with the examples you gave, I pass along verbal offers like those all the time. I don’t believe I’ve ever withheld any piece of any offer, but I know I’ll be more conscious of it going forward.

    My point is that it is easy enough to jump on the bandwagon and agree when the answers are clear-cut. It is a different matter to adhere to an obligation when one thinks that the rules don’t apply to his/her situation, i.e. when an agent judges that what he/she heard was not an offer. (general statement, I don’t have anyone in particular in mind)

    I like your approach to my hypothetical, easy enough solution — just mention it. Although I’m not sure I would have agreed yesterday when I first came up with it, I believe we are in agreement on how the code should be interpreted — very clear cut and very black-and-white.

    (Oh, and yes “enforceable” is what I meant. Thanks!)

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