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Handling Listings and Offers

MEMO

To: All associates
From: Management

As a reminder, once we take a listing we have a fiduciary duty to the seller to obtain the best possible offer for that seller. In doing so, you should be placing the listing into the MLS as soon as possible. The listing should be kept active for a reasonable period of time so that the seller may receive the widest exposure available for the property. There will be situations where you may exclude the listing from the MLS temporarily if there is a valid reason for doing so (property under construction, tenant issues). In such situations, you are required to fill out the Exclude from MLS form and submit this form to the MLS at the time the listing is taken. (CAR form SEL -Seller Instruction to Exclude Listing from the Multiple Listing Service or Listing Information from the Internet SEL, or local Exclude from MLS form). Many REOs and Short Sale lenders are now requiring that the listings be placed in the MLS for a reasonable period of time before they will consider accepting an offer.

ALL offers must be presented to the seller whether the listing is a standard sale or short sale. This is the case unless the Seller advises the agent IN WRITING to the contrary. An agent should not rely on a verbal instruction from a seller with regard to this issue. While it is certainly permissible to sell your own listing or have another agent with (Name of Company) sell your listing, it is imperative that ALL offers be presented to the seller and the seller have the final say as to which offer to accept. The seller should be advised to accept the best offer from the seller’s point of view regardless of whether the offer is from an outside broker or from within (Name of Company). The best offer is not always the offer with the highest price since terms may determine which offer is more desirable to a seller. For example, an all cash offer may be more desirable to a seller than a higher offer with a financing contingency. That decision is to be made in the sole discretion of the seller.

Since you have a fiduciary duty to the seller when you are the listing agent, it is not acceptable to have the seller accept a lower offer from your own client than from a buyer represented by an outside agent unless the terms of your offer are more desirable to the seller and the seller decides that the favorable terms outweigh the difference in price. One of the easiest ways to get yourself into trouble with the DRE is to violate this rule.
Unsuccessful buyers are contacting the DRE directly if they believe that their offers are not being presented to the seller. If the DRE investigates this matter and discovers that such offers have not been presented to the seller, you may be subject to harsh penalties from the DRE including the possible revocation of your real estate license. In addition, buyers and buyer’s agents are filing complaints with the local Association of Realtors.

When you are dealing with a short sale, your seller should still be accepting the best possible offer even if the seller will not be netting any monies out of the sale of the property. The argument that the seller did not care how much the offer was for because it was a short sale is not a valid argument. It is still in the best interest of the seller to make sure that the seller accepts the best possible offer subject to short sale lender approval. In addition, the seller may very well have a duty to the seller’s lender to obtain the best possible offer. If the lender discovers that the best offer was not submitted to them for approval, the lender may very well point the finger at everyone involved including the real estate agents.

It is now office policy that any offers that are rejected by our sellers should have page 8 of the offer initialed by the listing agent and the seller at the bottom, indicating that the listing agent presented the offer to the seller and that the seller rejected the offer without making a counter offer. While this is not a legal requirement, it is good business practice to have a method to notify the buyer’s agent and the buyer that there offer was presented to the seller. This rule would apply even in situations were there are many offers on a property. In such a situation, you, as the listing agent are still required to present ALL offers to the seller and it is not that time consuming to have you and your seller initial the paragraphs at the bottom of page 8 and return that page to the buyer’s agent. Doing so will eliminate many of the problems and hard feelings that seem to come into play in this market where many good offers are rejected due to the large number of buyers offering on the same properties. Communication is most important in our business and failure to communicate with buyers’ agents can only have a negative impact. When you are in this situation as a listing agent remember how you felt the last time you represented a buyer and you never heard anything back from the listing agent after presenting an offer, only to discover that the property was reported as sold in the MLS.

Please contact management if you have any questions regarding the procedures outlined above.

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