Ethics Question: Do you "say" there are other offers?

BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

This question comes out of frustration over the seemingly ubiquitous "We've received another offer, please give highest and best."

I live in a hot market, and it seems whenever I call about a property, there's always "another offer."

As a listing agent, it is my duty to get the best deal for my client, but it seems like sometimes the other agent doesn't actually have another offer.

Your thoughts?

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John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

I have a friend that owns over 600 SFR and is one of the most successful I know. When he is taking offers, he tells the potential buyers "we will be evaluating all offers after 5PM" or something to that effect. So he is not stating he has other offers, but the people making an offer may believe so. Tricky but honest wording IMO.

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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
8y
@Russell Brazil
"Or you could have hired your own agent to show you the property. My experience is that if someone wants to see a property I have listed, and they do not have an agent, there is close to a zero percent chance that buyer is a serious buyer."
And I completely get that, and I did finally ask someone else. But I have two questions then. First, as an agent, do you ever not call people back after they have left numerous messages - phone, email and text? And second, I always call the listing agent direct because I figure they would prefer both halves of the commission - is that not true? Would you prefer to split the money and then work with a peer?
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y
Originally posted by @Account Closed:

@Russell Brazil
"Or you could have hired your own agent to show you the property. My experience is that if someone wants to see a property I have listed, and they do not have an agent, there is close to a zero percent chance that buyer is a serious buyer."
And I completely get that, and I did finally ask someone else. But I have two questions then. First, as an agent, do you ever not call people back after they have left numerous messages - phone, email and text? And second, I always call the listing agent direct because I figure they would prefer both halves of the commission - is that not true? Would you prefer to split the money and then work with a peer?
What if the listing agent isnt really the listing agent but rather the owner of a team as is the case for many listings? In that case you would want to call the alternative agent whose information is listed in the private section of the MLS. Some teams have hundreds of agents, whose listings all have the name of the team owner on them wgo probably has zero idea about any of those listings. Im a solo agent, but the vast majority of my office are teams.
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Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
I hate best and final.... gets me every time lol.
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
8y
@Russell Brazil
"What if the listing agent isnt really the listing agent but rather the owner of a team as is the case for many listings? In that case you would want to call the alternative agent whose information is listed in the private section of the MLS. Some teams have hundreds of agents, whose listings all have the name of the team owner on them wgo probably has zero idea about any of those listings. Im a solo agent, but the vast majority of my office are teams"
LOL. Okley dokley then.
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
8y
Originally posted by @Account Closed:

@Russell Brazil
"Or you could have hired your own agent to show you the property. My experience is that if someone wants to see a property I have listed, and they do not have an agent, there is close to a zero percent chance that buyer is a serious buyer."
And I completely get that, and I did finally ask someone else. But I have two questions then. First, as an agent, do you ever not call people back after they have left numerous messages - phone, email and text? And second, I always call the listing agent direct because I figure they would prefer both halves of the commission - is that not true? Would you prefer to split the money and then work with a peer?
Depends on your state, In IL and WI agents can practice "dual agency" meaning they can represent the buyer and seller in the same transaction and get the full agent. Most agents I know will not do it even though it is allowed. It opens up so many doors to liability and getting sued it just is not worth it.
I am licensed in IL and WI and I would never do it. I also agree that a buyer without an agent is seen as not being serious
As far as returning calls, that can be common agent to agent. I stalk people on a weekly basis to get appointments sometimes
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
8y
@Brie Schmidt
"Depends on your state, In IL and WI agents can practice "dual agency" meaning they can represent the buyer and seller in the same transaction and get the full agent. Most agents I know will not do it even though it is allowed. It opens up so many doors to liability and getting sued it just is not worth it.
I am licensed in IL and WI and I would never do it. I also agree that a buyer without an agent is seen as not being serious
As far as returning calls, that can be common agent to agent. I stalk people on a weekly basis to get appointments sometimes"
I guess I never thought of the liability angle. As an appraiser, we have a lot of liability stuff to worry about, but I just let that worry go by doing the right thing in the first place and let the chips fall where they may (and I have E&O). That said - LOL - I will never understand or forgive an agent who can't answer the phone or return a phone call - never.
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
8y
@Account Closed - Even with E&O it's not worth it. You become so limited on what you can do and say. Every little thing can be sued over and if it is negligence E&O doesn't cover it.
I am a full time agent, so I deal with other agents all the time. It is mind blowing how many times it takes weeks of calls/texts/emails to get a response
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
8y
Originally posted by @Brie Schmidt:

@Account Closed - Even with E&O it's not worth it. You become so limited on what you can do and say. Every little thing can be sued over and if it is negligence E&O doesn't cover it.
I am a full time agent, so I deal with other agents all the time. It is mind blowing how many times it takes weeks of calls/texts/emails to get a response
That last part is so true. One time I had an agent that stood us up twice, so on the second time I call the list office. They tell me that I need to call the agent, that they don't know anything about the showing details. I explain my situation to no avail. So I ask to talk to the managing broker, and he says, "So what do you want me to do, I don't have the keys!?". Or when the showing instructions say "Text LA" who responds "Call the office" who says they'll call back when its confirmed and never does. The barrier to entry is low in this industry and with 14K+ agents in Chicago its a constant revolving door. It happens to all of us, not just unrepresented buyers. Many agents just aren't cut out for the business and don't find that out until they fail multiple times and screw their client in the process.
As to the multiple offers, I'm convinced that's the verbiage that has replaced "seller wants full list!". Every. Single. Time. I get that nonsense, even for properties on the market 120+ days w/ no price change. My standard reply is to call and ask where they need us to be at to get this deal done. Sometimes my clients go in at their top-dollar offer, other times we strategically come in low to make the seller feel crafty after we come up when they ask for highest/best. Its a silly gesture and I wish they would just counter, but its the "in-style" move these days.
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
8y
@Account Closed You didn't specify whether you are licensed as an appraiser only, or also as a licensed RE agent too.
If you're not licensed as a RE agent, there's nothing in the world wrong with you contacting the seller directly.
Normally the seller should direct you back to their agent, but once you explain that the agent isn't responding, you should be in a position to make an offer directly.
Here in MA, MLS rules and Realtor® code of ethics prohibit soliciting a listing from someone who is represented by another agent. I don't think a non-responsive agent is specifically addressed.
If I were representing a buyer in this situation, I think I'd create a strong paper trail of non-response by the seller's agent and then contact the seller directly. I'd also expect that situation to get ugly, but my job is to represent my client.
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Morgan Klein
Rental Property Investor · Jefferson, GA · Member since 2017 · 95 posts · 145 votes
8y
@Charlie MacPherson Charlie, when you say you were able to get the high bidder to waive their home inspection contingency, did they waive the right to a home inspection entirely prior to closing? Or did they waive the right to break the contract based on what they found in the inspection? I'm just curious if I could use this strategy when purchasing property to make my offer look more appealing. Thanks in advance.
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
8y
@Morgan Klein They waived the right to do a home inspection at all. As a buyer's agent, I would strongly recommend against doing that unless my buyer had the skill necessary to completely evaluate the home on his own before the offer. WAY too many things can be hidden.
In this case, the buyer's agent wasn't especially sharp. She tipped her hand when she submitted the offer, stating that the buyer REALLY wanted the home for his mother - which was a dumb move on her part. She grossly weakened her client's negotiating position.
So in general, an offer with fewer contingencies is a stronger offer than one with more. For instance, if you have hard money to back you up in the event that your conventional mortgage isn't ready on time, you could potentially waive the mortgage contingency.
If you were confident enough in the home's condition, you could waive the home inspection.
Both of these carry very real risks, but if you think you can handle them, you can submit a very strong offer - much stronger than an offer at a higher price that has those contingencies in it.
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Morgan Klein
Rental Property Investor · Jefferson, GA · Member since 2017 · 95 posts · 145 votes
8y
@Charlie MacPherson Thank you for that insight. I recently had a multi-offer "highest and best" where I was the first offer in, but lost the deal. I stuck to my initial offer, but had my realtor play up my ability to be flexible with the closing and that my financing is 100% approved. I'm not sure waiving inspection would have sweetened the deal in my favor, but it's an interesting thought.
If you don't mind me asking, what is the shortest amount of time you'd give a seller to reply to an offer? My realtor gave almost 24 hours on that deal, which I think allowed that second offer to get in. Had we pressed them to accept or decline in 4-5 hours, we may have that property in our portfolio.
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
8y
@Morgan Klein I typically allow no more than 4 hours for exactly that reason.
That won't work for foreclosures or short sales.
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Michael Henry
Real Estate Consultant · Brookfield, WI · Member since 2014 · 873 posts · 350 votes
8y
I let my clients know that there are offers and they should offer there highest and best. Many buyers are still trying to get deals or discount in value but at this moment in time that is hard to find. If the property is in a good location odds are him/she will be paying more than asking.
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Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
In AZ, while it is not regularly practiced, we are taught in RE school that we have the right to request that the first page of the other offer be sent to us to validate.
NOW, the reason why this isn't practiced is because the other side also has the right to NOT disclose terms of other offers if the agent has expressed written authorization from the Seller, which is obviously easy to obtain.
I am not sure when Listing agents started getting all squirly about sharing terms of other offers. It would seem like it would be in their Seller's best interest to shop offers, and by disclosing the offer they have in hand, they ensure that any subsequent offers come in higher, and with better terms (quicker COE, cash vs loan, etc). So, I am not sure at what point agents became so hush hush about their offers.
The one thing that remains true is that Realtors have an obligation to treat others honestly. It becomes an ethics violation if they say they have an offer when they really don't. So, while many agents may do this, they really are risking their license by doing this.
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
8y
If I don't have another offer I don't say I do. That being said it seems a place can sit for 45 days and then bam 2 offers within the same day. 4 total showings over the month and somehow all of a sudden I have interest.
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