Does A Listing Agent Have to Present Subsequent Offers After an Offer to PurchaseHas Been Accepted by the Seller?
A listing broker’s duties to the seller are enumerated in the Seller Brokerage Engagement Agreement. Among other duties, there is a clearly defined duty to timely present all offers to and from the Seller, even when Property is subject to a Contract to Sell. (F101 Seller Brokerage Engagement Agreement Section 7.(a)(2).
The obligation to present all offers, even after the property is subject to an offer to sell, is also included in the Code of Ethics Article 1 Duties to Clients and Customers.
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. Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide, as soon as practical, a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented.
The only way the listing agent is relieved of this obligation is if the seller has waived the obligation in writing.
Consider the following Case Study #1-13:
REALTOR® A had a 90-day exclusive listing on Seller X’s property. Seller X instructed REALTOR® A to list the property at $150,000 based upon the sales price of a neighbor’s house, which had sold a month earlier.
REALTOR® A aggressively marketed the property, filing the listing with the Board’s MLS, running a series of advertisements in the local newspaper, holding several “Open Houses,” and distributing flyers on the property at local supermarkets. REALTOR® A, whose listing contract was nearing expiration, held another “Open House” on the property, which resulted in an offer to purchase from Buyer Y at $15,000 less than the listed price. REALTOR® A, convinced that this was the best offer Seller X was likely to obtain, persuaded Seller X to accept the offer. Seller X expressed dissatisfaction with REALTOR® A’s failure to obtain a full price offer, but signed the purchase agreement, nonetheless.
The next day, REALTOR® B, a cooperating broker, delivered to REALTOR® A a full price offer on Seller X’s property from Buyer Z. Buyer Z had attended an earlier “Open House” and was very enthusiastic about the home’s location, stating that it would be perfect for his mother.
REALTOR® A advised REALTOR® B and Buyer Z that an offer had already been accepted by Seller X and that he, REALTOR® A, would not present Buyer Z’s offer. REALTOR® B and Buyer Z then promptly filed a complaint with the Board charging REALTOR® A with a violation of Article 1, as interpreted by Standard of Practice 1-7.
At the hearing, REALTOR® A stated that he felt he was under no obligation to present Buyer Z’s offer, since the listing agreement did not specifically provide that subsequent offers would be presented to the seller. Further, REALTOR® A felt that such a practice could only lead to controversy between buyers and sellers, as well as result in breached contracts. “Why get everyone in an uproar,” said REALTOR® A, “by presenting offers after one has been accepted? And what would I do if Seller X wanted to back out of the first purchase contract and accept Buyer Z’s offer?”
The Hearing Panel found REALTOR® A in violation of Article 1. In their “Findings of Fact and Conclusions,” the Hearing Panel cited REALTOR® A’s lack of understanding of the requirements of Article 1, as interpreted by Standard of Practice 1-7. The panel noted that state law did not prohibit the presentation of offers after an offer had been accepted by the seller; that the fact that the listing contract was silent on whether subsequent offers would be presented did not relieve REALTOR® A from the obligation to present such offers; that as the agent of the seller, REALTOR® A must always act in the seller’s best interest and advise the seller of all offers submitted; and that should the seller wish to consider accepting a subsequent offer, REALTOR® A must advise the seller to seek the advice of legal counsel.
Reference: Code of Ethics Article 1 Duties to Clients and Customers
Real Estate News, Brokers Blog & More