REALTORS® have an obligation under Article 1 of the Code of Ethics to promote the interests of their clients while treating all parties honestly. Texas Real Estate Commission rules require real estate practitioners in Texas treat people fairly.
While the Code of Ethics and TREC rules allow real estate brokers to “shop” the terms of offers (if not prohibited by law, regulation, or confidentiality agreement), disclosing terms of an offer to some prospective buyers and not to others or handling certain offers differently can open you up to accusations of dishonesty or unfair treatment.
Also keep in mind that clients can choose to disclose offer terms. For example, a seller could shop the terms of an offer to potential buyers in hopes of soliciting stronger offers. The choice of what to disclose about offers is the client’s alone.
Buyers should be made aware that sellers are under no obligation to keep the terms of an offer confidential unless the seller has agreed to keep them confidential. This does not relieve you of your duty as a REALTOR® to report any willful discrimination or fraud.
Great addition for Broker Responsibility training…..
Training buyers agents as to what to asked for and how to request the proper information
and listing agents as to how to secure this information from the seller
So they are prepared for buyers agents questions.
Better yet maybe we add this information to our listing
Agreement. It could go in the section related to back up offers.
More is better in this document. Oh and how wonderful would it
Be to have this in MLS so we know upfront… transparency delux…
Quite frankly, I found this to be an ambiguous and worthless article. What did it say? Realtors are required to treat their clients fairly? I thought we all knew that. I am normally in a buyer’s agent position for “multiple offer situations.” To me, the seller should be required to disclose how many offers they have and the terms of those offers. What constitutes “multiple offers?” Are these offers full price or several thousand below full price? It gives the seller an unfair advantage over the buyer by playing on their emotions that the house they are now bidding on… Read more »
When there is no scarcity in the grocery store yeah that is ridiculous, but real estate and the emotional purchases have much scarcity, multiple contracts reflect that in our area, especially when a buyer falls in love with a home.
Informative article. What happens if the client is selective i.e. asking to shop ONLY with buyers with cash offers? Would an agent violate Article 1 of the Code of Ethics?
I agree with Joe…. ~This article opens up a can of worms for an inexperienced agent. It says that a seller may do something that an agent may not do. ~But how many agents understand that the seller can’t tell you to repeat such things…?? If what you are saying is illegal for an agent to say, then you can’t repeat what your seller said. > We are faced with a bad situation every time the listing agent says “We have a multiple offer situation.” ~How does a buyer’s agent know that is the truth? How do we know how… Read more »
It’s a good situation, lets not decide on having a bad situation because a lack of experience but a learning opportunity for agents.
I can’t find anything “good” about having multiple offers on the same house. ~And agents don’t need a “learning opportunity.” The agents in this market are working overtime for the same results we used to get when we had a stable market. ~Maybe we should figure out how to go back to the old rule of “First come, First served.” Why not let the early bird get the worm? Too many buyers (…and their agents) have gotten wise to this multiple bidding market, and they submit inflated offers just to snag the emotions of the greedy seller. Then they either… Read more »
This article left me with same questions. Why can’t the seller be required to disclose such offers in a more detailed manner for the buyer? Example: Two cash offers over asking price, one offer financed.
The line of “multiple offers submit your best and highest does not offer much to the prospect buyer.
I’m sorry, but I have to disagree with the Code of Ethics on this one. Disclosing the terms of offers is every bit as unethical as a buyer writing offers on multiple properties, tying up multiple sellers, and then opting out of the contracts they don’t want. These kinds of shenanigans always come out when the market is way out of balance, and unfortunately, there are always agents who are willing to cross that line, because they think they are doing right by their client. I think agents are losing sight that they should never burn the bridge they may… Read more »
My daughter and fiancee have been robbed of many offers they made. They are bidding way over asking just to try and get a home..with no appraisal amount necessary and 30 free lease..yet they go from being the highest bid by thousands to loosing out at the last minute because seller realtors are using an auction style approach.. by telling the highest bid..
Unethical to me.. they should take offers then review with client . They also are not going to next in line after financing falls thru for these over zealous bidders. They have cash to bridge the difference
You are wrong on this. Code of Ethics is there for all of us to adhere to. You may not like the way the game is played but you can always get out of the business.
Can we now have Realtors disclose multiple offers to us appraisers? Most are very skeptical about the idea, but with multiple offers I can use this as a data point to show demand for the property, especially when comps aren’t meeting sales price but in a growing market. Can someone help me understand why disclosing terms to buyers is unethical as a client as it appears to be suggested in the comments?
“showing demand” for an individual property should be obvious from the overall market conditions. The house is worth what it is worth, regardless of how many offers it got on it. (Maybe that was due to clever marketing by the listing agent, and therefore had no bearing on the value of the house on the next block.) Too many appraisers think it is their job to put a lid on an accelerating market, and keep the values down. ~What if the first offer you get is the best one, and you don’t need to advertise for multiple offers??
It’s a point of data, not a deciding factor, when my data doesn’t show trends and is ambiguous I look for more data. I always try to have a conversation with the listing agent on marketability of the property even though their position is biased towards that client. If the first offer is the best one, then great! I don’t disagree with you. Some homes in markets have more demand than others, due to finishes and location, this demand can be very obvious from buyer reactions and multiple contracts, sometimes when there is a gap between sales price and developed… Read more »
On multiple offers, the listing agent should advise all parties of that situation and advise to submit their best and final offer. Agents are failing to handle multiple offers appropriately. Brokers should discuss this in meetings and include the confidentiality issue also.
So I put 36;000$ down on a house that this realtor showed me he was nice and trustworthy so I thought, As time went on times got hard and I started receiving forclosure warnings in the mail . Being scared to death thinking I was going to lose everything with no return I called my realtor ..And without Hesitation He offered to buy my House 10000$ so that way I don’t lose out everything and because I had no guidance and lack of knowledge I thought this was my only option and Definitely didn’t inform me of other options… Scared… Read more »
is there a time frame in which offers must be presented to the sellers?
How about seller having to make a decision once they receive an offer or multiple offers on their home. I have a buyer who submitted over the asking price and the listing speaks to me daily and next thing I know it’s 2 days later still waiting on offer to be accepted, rejected or counter. Agents tells me later that the seller received multiple offers and she wants me to have my buyer to resubmit her highest and best offer. I informed her that the buyer submitted her highest and best offer when she initially submitted her offer it’s now… Read more »
should we disclose their are multiple offers to the other agent
Does a listing Realator have to produce a signed multiple offer form to buyers so they can threaten you with the multiple offer trick
In other words, as responsible, educated Texas REALTORS we need to be telling our sellers
‘Hey Y’all, you know you can tell all the buyers what the highest offer /number is right?’
^^Clients can choose to disclose offer terms. For example, a seller could shop the terms of an offer to potential buyers in hopes of soliciting stronger offers. The choice of what to disclose about offers is the client’s alone. Sellers are under no obligation to keep the terms of an offer confidential unless the seller has agreed to keep them confidential.
First time in a buyer agent situation and it is super stressful as the Seller agent only mentions having “STRONGER OFFERS” and no details. Could she be lying to make my client raise their offer? I mean this should be transparent information so the buyer doesn’t feel like he is getting fished for more money!
Since the seller is under no legal obligation compelling non-disclosure,is it the seller’s broker/listing agent requesting confidentiality on the terms of offers;multiple or otherwise? Agreement found with Joe Shurgot whereas seller entertaining multiple undisclosed bids for property while encouraging the continuation of “highest and best” becoming a blindfold auction as an unfair process at it’s core for the buyer.