How are you handling multiple offers?

By Michele McCaskill, VP of Risk Management

I am often contacted by agents who question whether or not their offers were ever presented to the seller by the listing broker.  In addition, questions regarding how to handle multiple offers abound.

A quick look at the Realtor® Code of Ethics (Code) and real estate license law can answer any question you may have about what to do and how to do it.

Article 1 of the Code requires Realtors® to protect and promote the interests of their client and to treat all parties honestly.

The bottom line, for those that do not want to read any further (although I hope you will), is that ALL offers are to be presented to the seller, immediately.

Standard of Practice 1-6 states that “Realtors® shall submit offers and counter-offers objectively and as quickly as possible” [emphasis added].

Standard of Practice 1-7 reads, “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” [emphasis added].

Likewise, license law requires real estate licensees to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy and sell real estate to both the buyer and the seller (NCGS §93A-6(13)).  Failure to do so could result in disciplinary action by the North Carolina Real Estate Commission (“NCREC”).

The NCREC has provided that a listing broker has no authority to reject an offer on behalf of their principal even if the offer is unfavorable.  Instead, ALL offers must be presented to the principal.  The broker may at that time highlight for their principal the disadvantages of any submitted offer.

But what do I do if I get more than one offer on a property at about the same time?

Many of you have undoubtedly found yourself in a multiple offer situation.  Navigating through this phenomenon can be a daunting task.  When you do receive multiple offers at about the same time, the NCREC provides that all of the offers should be presented to the principal at the same time; regardless of which offer is the highest, which company submitted the offer or which offer was received first.

The law of agency requires a listing agent to communicate all offers to their principal as soon as possible and to disclose any additional information that might affect the principal’s decision to accept the offer.  A broker should never withhold or delay the delivery of offers or information from their principal.

NCREC Rule 21 NCAC 58A .0106 requires all brokers to “ . . . deliver a copy of any written agency agreement, contract, offer, lease, rental agreement, option, or other related transaction document to their client within five days of the document’s execution.”   Verbal communication of an offer by a buyer’s broker to the listing broker does not relieve the buyer’s broker from their duty to deliver the offer to the listing broker.

In addition, according to the NCREC, listing brokers must promptly inform the principal of any possible offers that may be forthcoming.   This means that an offer verbally communicated to you as the listing broker should be communicated to your principal as soon as possible.

One final note when dealing with multiple offers, as many of you are in this market, is to remember that you are not permitted to disclose the terms of the offers to competing buyers without the express authority of the offering party.  In addition, the listing broker, only with the seller’s express permission, may outline any terms the seller may favorably consider as long as the information is provided to all competing buyers.

10 thoughts on “How are you handling multiple offers?

  1. Cindi,
    The best way to hold an agent accountable for ethical practices is to file an ethics complaint against any agent you
    believe has acted unethically. Considering there is no required form to be signed to prove an offer was presented, if
    you believe your offer was not presented and the agent provides no other form of proof that it was, you should
    consider filing a complaint. If an agent is acting in the best interests of their client, he/she is presenting all offers
    objectively and letting the client make the ultimate decision.

  2. How do we hold agents accountable for
    ethical practices in this case? Are
    there no required forms to be signed?
    Sometimes you wonder about fair
    presentation of offers and dual
    agency situations, did all offers get
    reviewed objectively, and why did the
    list price get increased just before
    the signed contract is forwarded back
    to the buyer agent? It is creating a
    breakdown of trust between agents/firms.

  3. Hi everyone! Sorry for the delay in responses to these great questions. I will try to address each and if I don’t fully answer your question, please let me know!

    Austin, yes, the North Carolina Real Estate Commission does state that a listing broker should obtain the owner’s consent before telling anyone that the owner has received multiple offers.

    Lee, if the listing agent states there are multiple offers when in fact there are not, then the listing agent is potentially in violation of the Code of Ethics, which requires REALTORS to treat ALL parties honestly.

    Sandra, there is form 340-T, Response to Buyer’s Offer that could be used although it’s not required. What you could do is send that form along with your offer and ask that the seller sign it if they choose to reject the offer. It won’t guarantee you get the form back but it might help those agents who are unaware the form even exists.

    Proof that an offer was presented can come in varying forms. Obviously, getting a 340-T back is the best proof. I’ve heard that some listing agents will give the date and time the offer was presented. Some include the first name of the buyer along with the date and time the offer was presented. There are undoubtedly various other ways to offer proof but the bottom line is that if you don’t believe your offer was ever presented, consider filing an ethics complaint. If the offer was, in fact, presented, the listing agent will more than likely present such evidence as part of his/her defense.

  4. Hi all! Michele’s out of town and wants to give your questions the attention they deserve, so she’ll have some responses for you when she’s back next week. Keep them coming in the meantime!

  5. What if you request proof of multiple offers by asking for copy of p.12, Notice Information, which typically contains
    no info other than the broker’s contact information. Any buyer info could be redacted.

  6. What happened to buyer receiving a seller signed rejection of offer? I presented an offer with copy of loan approval
    that listing agent responded with verbal rejection. I asked for the seller signed rejection and got this response from
    list agent who is a BIC “I have never heard of such a thing”. The property closed at $11,000. less than the offer I
    presented. It was a cash sale but took 30 days to close which was the closing time on my offer with approved
    conventional financing.

  7. Michele should answer the question. I think seller who wants the highest price and has not accepted any offer in
    multiple offer situation tells listing broker to revert to the buyers that highest and best is required by (date time). To
    Lee’s question I think that is misrepresentation by listing broker. Disclosure I do not practice law. I offer an opinion in
    a private forum.

  8. What happens if a Listing agent states there are multiple offers & actually there is only one?

  9. Is it not also true that you must have the express permission of the seller to even disclose
    whether you have received multiple offers?

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