An Agent must present all offers to their client.
Here is Virginia Statute: 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 dictate the format of the offer. 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 REALTORS® 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 the issue of Listing Agents not presenting the offer to purchase, are Agents declining to write offers. Prior to entering into an agency relationship (either the implied or expressed) the Consumer is a Customer and is not due certain levels of skill. Upon becoming a Client obligations are imposed. These obligations compel Agents 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 that the emphasis is on the “Buyer’s objectives” not the agent’s objective, therefore trying to obtain a higher commission by offering a higher price, or “saving face” with the opposing Agent are against the Code. The Agent is hired to carry out the Client’s wishes and attempt to obtain the best property at the lowest price possible.
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)
If the Seller wishes their Agent to screen offers and only forward those which meet a certain criteria, Agents should get that directive in writing and PROFESSIONALLY explain to the Selling Agent that the 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 to enlighten self interest, present all offers and treat ALL Agents and Clients with respect and professionalism. It’s simply what the client hired the Agent to do.
A Selling Agent who doesn’t write “lowball offers” is compelled to explain that policy to the Consumer before he or she enters into the agency agreement, otherwise the Agent is ommitted.
The Short Sale process presents some unique issues for some Agents. The chief issue is multiple offers. With the low price of certain Short Sale properties, it’s not a surprise that occasionally more than one offer arrives. The Listing Agent must present all these offers to the Seller. The Seller then dictates which offer they desire to accept. The Seller may accept multiple offers, knowing that the Lender will accept only the highest and best. The recommended way to proceed with multiple offers is to ratify the contract that appears to be the highest and best, and ratify subsequent offers as “Back Up” offers, allowing the Buyer Agents to know what the true status of their offer to purchase. The lender’s approval contingency does not preclude a Listing Agent from submitting additional offers to the lender for them to choose the offer that generates the highest yield.
