I am seeing more and more situations where my clients are dealing with multiple offers. This article from Realtor Magazine helps with guidelines for agents and sellers to follow to assure that the best deal moves forward.
If a seller is presented with multiple offers from the listing agent, all at list price, is it the obligation of the listing agent to disclose terms of the other offers to the buyer’s agents so the buyers are aware not only that there are multiple offers but also that the buyers might want to enhance their offers?
A. In any multiple-offer situation, it’s the seller, not the listing agent, who calls the shots. The listing agent’s duty under Article 1 of the Code is to “protect and promote the interests of their client” and to “treat all parties honestly.”
The listing agent should give their seller client information and advice about negotiating multiple offers. Standard of Practice 1-15 provides “REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property.”
Talk with the seller about whether he or she wants the existence of multiple offers disclosed. If the seller approves such disclosure and a buyer or cooperating broker asks if there are multiple offers, then the listing agent is required to disclose that.
Standard of Practice 1-13 gives guidance for both buyer’s agents and listing agents about disclosure of the terms of the multiple offers. “When entering into buyer/tenant agreements, REALTORS® must advise potential clients of . . . the possibility that sellers or sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.”
Buyer’s agents should discuss how multiple offers may be handled, including the fact that once an offer leaves the buyer and buyer’s agent’s hands, there is no duty of confidentiality that the seller or listing agent has to the buyer to keep the terms of the offer confidential unless state law prohibits a listing agent or seller from disclosure of terms or there is a preexisting confidentiality agreement with the parties. Listing agents should always look first to their seller client for direction in negotiating multiple offers.