Are Realtors required to present offer?
Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
Is there a Realtor "law" that requires a listing agent to submit any offer to the seller? If there is could you tell me exactly where it is in the Realtor "rules"?
I'm asking the question because I submitted an offer and the listing agent laughed at it and said I will not present any offer that is under $X. The agent told my agent "bring me back an offer that is over that amount and I will submit it."
So now I'm really getting ticked at agents that won't submit offers because "they" think it's too low and won't let the property owner decide if it's to low or not.
Thanks,
-Michael
It is interesting to hear investors take on this. Inflating the suggested value is a rule violation for REALTORs by the way.
If you put an offer in writing, it should be submitted. Even if I know it is lower than what my client has said they have to have, I would let them know anyway since it only shows I am getting activity and interest in the property. It is correct it should be in writing the seller will not consider offers below a certain amount for CYA.
I like the approach of calling the bluff of multiple offers by sending the letter. I cannot contact another REALTOR's client to do this but like the idea of playing hardball for an investor to force the issue. Since the listing agents job is to get the most for the property, I am sure they would skillfully explain their dirty deed as actually being them "looking" out for the seller, trying to get more for it, etc, etc, blah blah blah.
I have heard of a movement to make the offer process more transparent, another good idea. Anything to drive the tricksters out is good to me. And I have hated the few times I had a listing in multiple offer situation.
Michael,
I believe it's against the "code of ethics", which, essentially means nothing.
Here is an excerpt:
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)
http://www.realtor.org/MemPolWeb.nsf/pages/COde
Having said that, you probably have the legal right to present directly to seller.
No wonder tons of real estate agents are starving. Some think they are lawyers, not sales-people.
I remember in my real estate class, we were told all offers must be presented. When my parents bought their last house, their agent said she was "embarrassed" to present their offer. My father told her he'd find another agent who wasn't. She presented it.
Unless I am specifically told by my client regarding a lower limit on offers, I will present any offer on paper. But I do not waste time with verbal offers because in my state they are worth the paper they are written on. I know many times the offer may be rejected, and hope for a counter, and not a butt chewing. Many sellers take lowball offers really hard, but if the potential buyer signs the papers, I present the offers. And no matter how pissed off my client is, I always work hard to get a counter offer from them! But if I represent the buyer and not the seller, I love to make the other agents take the abuse from the sellers!
Now we all know is Agent A works with listing agent B they talk on the phone and seal a verbal...holding the house for the client of Agent A so that no one else can get the house in the morning.
Otherwise, if realtors are too weak kneed to present low balls, change realtors. They won't work with investors long if they're not negotiators. To most realtors, a good deal is one that they think can be bought at market value...investors can't afford to buy at market value usually.
I saw a realtor buyer insist on being there when her offer was made to the owner and the broker refused to allow her to be there. I'm sure they have rules but do they ever follow them?
If the agent refuses to present the offer you can avail yourself of the nuclear option and present the offer directly. Whether the seller accepts it or not is a different matter and if they do accept it whether they still pay the commission is another different matter.
You can write your presence to be there when the offer is presented as a condition of the offer. Meaning, if they present it without you it is void at your option.
However, it is extremely stupid in my opinion to put that kind of requirement on the offer. If you can't make the agent understand the offer what makes you think you can get the seller to "get it" with the agent sitting there shaking their head?
Joe's answer is the most accurate. In most cases; the listing agent works exclusively for the seller-Period! If the seller has a set price or range they will accept and it's in writing-the agent must adhere to the contract. However, if it's a reasonable offer-most agents will talk to the seller about it. I work with Buyers only. The listing agents hate it when I tell them I will present my buyer clients offer in person. I tell them they can be present but I don't ever tell them what the offer price is going to be. I make sure I get as much info about the seller as possible and I will never have just one offer on the table. Give them a choice. Cash, Terms, or both.
Mathews Realty Advisors LLC
Joe's answer is the most accurate. In most cases; the listing agent works exclusively for the seller-Period!
I agree that Joe's response is accurate.....in Texas (Actually, I have no idea because I'm not licensed in Texas, but let's take his word for it.)
However, in Florida, real estate agents are presumed to be transaction brokers unless otherwise documented. This, by no means, implies that listing agents are a fiduciary to the seller. Let's be careful about generalizations.
This topic comes up frequently, but I would be impressed if someone could actually find legislation that requires a real estate agent to present all offers to a seller.
I'm not saying it doesn't exist. I'm just saying that I've never seen it.
I made an all cash email offer on a property directly to the listing broker. I offered to put it in writing and tender an earnest deposit. The response I received was a phone message at my home stating that my offer was too low and that they had multiple offers on the property already way higher than mine. I wonder what happened to all those offers................the property still is not marked "pended". This was Caldwell Banker floridamoves.com. I emailed again for status and haven't heard a thing.
At the end of the day, it does not matter to me if I buy one particular property over another. It probably makes a big difference to the seller and their agent if I buy another property instead of theirs. Especially in this market.
Call your state's department of RE.
I think most states require that a agent present all and any offers ,regardless of how small they are.
In the past, I had someone threaten to report me to the DRE unless I provided them undenyable proof that I submitted the offer to the seller, so I forwarded them an email from the bank's AM telling me the offer was a joke....was enough proof.
I've been really reluctant to post links like this but this is how one of our SMEs deals with the agent playing the "we have multiple higher offers" game.
http://fieldguide.reitactics.com/we-have-multiple-higer-offers-yours
Taz, I Loved IT!!!!!! So if the Seller is bank owned, are they suggesting sending it to the bank??
It is interesting to hear investors take on this. Inflating the suggested value is a rule violation for REALTORs by the way.
If you put an offer in writing, it should be submitted. Even if I know it is lower than what my client has said they have to have, I would let them know anyway since it only shows I am getting activity and interest in the property. It is correct it should be in writing the seller will not consider offers below a certain amount for CYA.
I like the approach of calling the bluff of multiple offers by sending the letter. I cannot contact another REALTOR's client to do this but like the idea of playing hardball for an investor to force the issue. Since the listing agents job is to get the most for the property, I am sure they would skillfully explain their dirty deed as actually being them "looking" out for the seller, trying to get more for it, etc, etc, blah blah blah.
I have heard of a movement to make the offer process more transparent, another good idea. Anything to drive the tricksters out is good to me. And I have hated the few times I had a listing in multiple offer situation.
I agree, Mark. I like transparency in every transaction. If you have to try to hide it, you probably shouldn't be doing it.
What about if you want to do a Lease Option on a house? I found a house, had a Realtor show it to me as they said they would do a Lease Option. But she said her and her broker will not submit my offer because its too low (my initial down payment) as it wont cover her commission fees or something like that? But dont they have to wait to get their commision fees when I actually buy the house? Not upfront? Im very upset and could use some advise.
Old thread, but I'll add my two cents....
If you're an investor or savvy home buyer without a buyers agent of your own and trying to make sure the sellers agent presents your written offer, first use county/public records to find out who owns the property.
Address your written offer/proposal TO THE OWNERS c/o their listing agent. Listing agent will likely freak out that you know who the owners are and convey your offer/proposal/message (as they should). Of course you could also send by registered snail mail to property, sellers agent & wherever the owners live - but this adds delay. The sellers agent IS the agent. The conveyor of messages, offers & proposals among other things.
As long as you are not in any way attempting to circumventing the listings agent due commission(s), then why shouldn't they do their job?
@Mike Matthews I think this thread is about to be very relevant again. As an agent I can't go to the seller directly as an agent but that poses a gray area and honestly with the amount of trash agents that negligently do business I'm not worried about how I operate.
Michael,
I believe it's against the "code of ethics", which, essentially means nothing.
Here is an excerpt:
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)
http://www.realtor.org/MemPolWeb.nsf/pages/COde
Having said that, you probably have the legal right to present directly to seller.
No wonder tons of real estate agents are starving. Some think they are lawyers, not sales-people.
This is correct--save that an ethics violation can cause an agent to lose it's license and a brokerage to risk the same for employing that agent. Next steps in this scenario: 1) Asking the agent if the landowner specifically stated to reject offers below a certain dollar amount. 2) If the agent doesn't respond or responds with a no, notifying them of the ethics violation. 3) Notifying the brokerage of the ethics violation. 4) Completing the form for the violation with the local real estate governing board. 5) Submitting your offer directly to their client, and bypassing the agent--check local laws on this one, as well as the do not call registry, before doing so.
If this thread is about to be relevant again, I'd like to point out that buyers who believe listing agents are unethically not submitting offers are likely wrong 99% of the time. As a listing agent who has helped many investors sell off their inventory, I waste a lot of time weeding out "buyers" who really think I must submit any tentative offer they put in a text, email, verbal, or using non-binding letters of intent. Listing agents are required to submit complete, signed written purchase offers, real ones that are ratified if seller accepts, and seller can limit that even further if they state it to me in writing. For properties that I know will attract many investors, I explain wholesaling to seller at listing, that they are likely to be inundated if they don't limit it, and then have seller state in writing, up front, that I should not send them anything under a certain price or with certain terms like fully assignable. For buyers who think they can demand to see/speak to seller directly, I explain seller has no interest and hired me to avoid that scenario. I'm not sure why so many buyers still think that their ultra-low offer is so special, even after my explaining that seller isn't receiving offers in that range at this time and will not allow assignment. They must realize listing agent would advise seller that if they're willing to entertain offers that much lower than list, we can just drop list price and start a bidding war.
I only hire Realtors that are very good negotiators. My agents would never waist my time with low ball, non negative deals.
MY agents know my lowest acceptable price.
If this thread is about to be relevant again, I'd like to point out that buyers who believe listing agents are unethically not submitting offers are likely wrong 99% of the time. As a listing agent who has helped many investors sell off their inventory, I waste a lot of time weeding out "buyers" who really think I must submit any tentative offer they put in a text, email, verbal, or using non-binding letters of intent. Listing agents are required to submit complete, signed written purchase offers, real ones that are ratified if seller accepts, and seller can limit that even further if they state it to me in writing. For properties that I know will attract many investors, I explain wholesaling to seller at listing, that they are likely to be inundated if they don't limit it, and then have seller state in writing, up front, that I should not send them anything under a certain price or with certain terms like fully assignable. For buyers who think they can demand to see/speak to seller directly, I explain seller has no interest and hired me to avoid that scenario. I'm not sure why so many buyers still think that their ultra-low offer is so special, even after my explaining that seller isn't receiving offers in that range at this time and will not allow assignment. They must realize listing agent would advise seller that if they're willing to entertain offers that much lower than list, we can just drop list price and start a bidding war.
This is true--however, part of the concern here is transparency. If the broker knows, and you know, that the client has communicated that they would not entertain any offers below a certain dollar amount... what's the harm in a formal rejection letter?
On a side note, the main reason for home prices being so high is restricted development. We're 70M homes short, by historical ratios. There are 144M homes when there should be at least 214M homes.
@Michael Shadow All written offers must be presented. The only exception to this that I know of is once a property is under contract we as agents still have the duty to present an offer UNLESS it is written into the listing contract that the seller doesn’t want to see any other offers once the property is under contract.
Call your state's department of RE.
I think most states require that a agent present all and any offers ,regardless of how small they are.
In the past, I had someone threaten to report me to the DRE unless I provided them undenyable proof that I submitted the offer to the seller, so I forwarded them an email from the bank's AM telling me the offer was a joke....was enough proof.
Why bother with the RE licensing board? Just find an agent that's on board with your buying style. It'll work better for both of you.