Is refusing to submit my buyer’s offer an ethics violation?

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02/25/2016 | Author: Editorial Staff

After submitting my buyer’s offer for a property, the listing agent told me she wasn’t going to present the offer to her sellers because she thought it was too low. I told the listing agent that it’s a legitimate offer and she should leave it up to the sellers to decide how to proceed. Will she be in violation of the Code of Ethics if she doesn’t present my buyer’s offer?

If she doesn’t present the offer to the sellers due to her personal opinion instead of the sellers’ instructions, it’s likely a hearing panel would find her in violation of Standard of Practice 1-6 of the Code of Ethics, which says that REALTORS® shall submit offers and counteroffers objectively and as quickly as possible.

While the sellers may reject the offer, it is their right to do so (or accept it or submit a counteroffer)—not the agent’s. The only situation in which not presenting the offer would be acceptable is if the seller gave the listing agent explicit instructions to not present offers below a certain amount.

Even if the sellers have previously rejected an offer with your buyer’s purchase price or a higher one, the agent shouldn’t assume the sellers would reject your client’s offer. The sellers’ circumstances may have changed, or aspects of the offer other than the purchase price may outweigh the dollar amount.

Categories: Ethics
Tags: ethics q&a, ethics, sellers, offer


Comments

James DeBerry on 03/04/2016

except…. Well, I can’t blame autocorrect on that one!

James DeBerry on 03/04/2016

NEGATUS OBLIGATUS: Until they sign a performance contract with a buyer, the seller has no obligation accept to pay you a commission for bringing them a full price contract with NO contingencies…. good luck with that.

COMMON COURTESY: A Buyer’s Agent may request to tag along when the LA presents the offer but must remain absolutely quiet unless asked a question by the seller or the LA. As a general rule, we all should first respectfully submit timely offers. If the offer is rejected by the LA, tell your client that the LA rejected your offer. Let them respond. Also, ask the listing agent if the seller has requested a minimum and if the LA is allowed to disclose it. Furthermore, it only seems more respectful if the buyer’s agent would say something more like: “If your seller is amenable, I am available to be with you at the presentation of the offer to answer any questions that you or your client may have…”  Doesn’t that sound a whole lot better?

NO WITHHOLDING: The IRS reserves this title for anyone who performs services for you if you can control what will be done and how it will be done.  An agent (The Broker), or a licensee authorized to act on behalf of the agent is an Independent Contractor - not an employee.

LAST EFFORTS: Just like the seller is unrestricted, SO IS THE BUYER. The buyer cannot be controlled by anyone from contacting the seller directly if the buyer feels that their offer is being shoved under the rug.  Of course as a buyer’s agent I would never recommend such a thing..  o;-)  - Yes that’s a halo.

NO FORM NECESSARY: Email the offer and you have time-stamped proof of the delivery or attempted delivery.  I always send a follow up text message to the LA regarding the emailed offer and ask for a confirmation of receipt of the offer. This is a permanent record. Archive it or print a hard copy for the file for later if necessary.  Also, call the listing agent and speak with them at least 1/2 the time you are communicating with them. We are, after all, in the people business!

Richard Ryon on 03/04/2016

Dear Rick,
I am sorry that you took my comments personally, I usually don’t expect agents to be so thin skinned. While I may finesse a point to a client or customer, I expect other agents to know the rules and I find it beneficial to be blunt and to the point with them. It is very effective in getting the attention of agents who do not know or are not following the rules.

Rather than get into a tit for tat on every point, I will make a few brief comments on your latest and refer interested parties to my past posts. I have clients wanting my services and must move on.

It is great that you have modified your stance on requiring sellers to sign a document evidencing that their agent is doing their job. My point that neither TREC nor TAR have any authority over sellers or buyers has been made.

Our clients are best served when buyer’s agents stick to their side of the transaction and listing agents do the same. Making accusations that the other agent isn’t doing their job and demanding that they prove to you that they are is destructive to your own clients goals. The other agent will respond with hostility. You obviously do when your actions are questioned.  Bringing additional conflicts into a transaction hurts your client’s interest.

One reason seller agency is so pervasive is because sellers DON’T want to deal directly with other parties. Otherwise, FSBO’s would dominate the market. They aren’t!

Current law in Texas provides for agency, and our market is doing quite well, thank you.  While there are other contributing factors to a healthy market you fail to make an argument that agency is broken and needs to be fixed. As least for agents that follow the rules.  Whether we “evolve” and change to facilitation as in other states, or they evolve our way in the future is immaterial. If you are going to work in Texas TODAY you need to follow TODAY’S rules and stay away from other agent’s clients unless invited! If you are having trouble with agency, try following the rules as they are, not as you wish them to be.

Rick DeVoss on 03/03/2016

Unbelievable!
(Other comments have been posted since I started writing my last remarks.)

What makes you think that “agency” is so sacrosanct…?
The concept of agency is not used in some other states, so maybe we need to take a hard look at what Texas is doing, and maybe it needs to evolve.  For example, in New Mexico, (where I have a broker’s license), they usually do not ‘represent’ the seller or the buyer, but they facilitate the transaction.  ...And the concept works well for all parties.

It seems that some agents in Texas are not interested in “facilitating” the transaction, but only boosting their own ego.  It is not the Listing Agent’s job to Rule the transaction.  Interesting how all of the previous comments sound like they are coming from a disgruntled listing agent…  One has to wonder how he acts when he is the buyer’s agent.

Most sellers would have no problem listening to the buyer’s agent present an offer.  Isn’t he the one who knows both the buyer and the offer better than anyone else?  ~Just what does the listing agent know about the buyer??  The buyer’s agent is actually the one who is going to make his house sell, so most sellers would welcome him with open arms.  (Many times the listing agent’s actions were limited to advertising and placing the house on MLS.)

Me thinks it might be the listing agent who is poisoning the mind of the seller, and trying to tell him that none of the other agents are worthy of his time.  ...So just why is the young, newish listing agent more capable of presenting an offer than the more experienced buyer’s agent who has sold ten times as many houses…??

It is interesting how all buyer’s agents have been portrayed as “pushy”, when the remarks written herein seem to be coming from a very pushy seller’s agent.  ...I have heard seller’s and buyer’s alike make the comment that the transaction would have gone a lot smoother without the two agents in it.  ...Maybe we should really think about becoming “facilitators” instead of having all these personality clashes between agents, and let’s get the transaction closed as easily as possible for the buyer and the seller.

Maybe the Listing Agent’s duties should be relegated to simply advertising the property, and ALL of the offers should be presented to the seller by the buyer’s agents….  ...And then it would truly be first come, first served!

 

Rick DeVoss on 03/03/2016

> Mr. Ryon—- I do not appreciate your personal attacks in your remarks herein, and neither are they appropriate.  A Broker should act professional, please.

> Mr. Williams—- You make a very good point, and I think some of us, me included, have overlooked those types of cases in our comments.

I wish to apologize for some of the remarks I made in haste.  If we were discussing this in a classroom environment, it would be different.  (And I think our instructors need to bring these issues up in CE classes.)

There are always different scenarios where a general rule does not apply, and sometimes we get too excited writing herein, and we submit remarks with blinders on.  —-For example, when I said the agent should try to present an offer in person, I did not mean that to apply to an out-of-town seller.  I also did not mean it to apply to a “$10,000 vacant lot.”  ~You have to be reasonable when discussing such issues.

I was primarily referring to those agents who have gotten so lazy that they never leave their office, and present all business via a computer.  (or other electronic device)  ...They don’t take the effort to sit down with a client and explain the content of a contract which they are about to sign.    (I recently saw the agent send the offer to her buyer for signature, and he never got the benefit of an explanation of the terms of his offer.  > Is that truly earning your commission when representing a buyer??)  P.S. ...It caused problems later when we began negotiating the offer, since the buyer had no idea what he had agreed to do!

I will re-word my opinion:  I think that the Buyer’s Agent has the right to request presenting the offer to the seller.  ...The Listing Agent has the responsibility to ask the seller if the other agent may accompany her to the presentation.  (That could be on a 3-way phone conversation.)  ...But the seller can do anything he pleases, and it may not please either agent.

Remember:  The seller signed a contract asking the Listing Agent, and others, to sell his property.  He has some responsibilities to act rationally under the terms of that contract.  And although the listing agent is the seller’s “employee”, he is also the professional who is in charge of marketing & selling the house.

If we design a form to document that an offer has been presented, then the Listing Agent has the duty to present that form for the seller’s signature.  And if he refuses to sign it, then it is the Listing Agent’s duty to note the date & time, and possibly say that the seller refused to sign it.  (Isn’t that what you do with a buyer who refuses to sign the IABS form??)

The whole point here is that TREC or TAR can insist that agents use a certain form, but it cannot penalize a seller or buyer for not signing it.  (We have other forms that would fit into that category.)

So why would it be so onerous for a Listing Agent to use such a form to document when they had presented an offer?  ~I have seen agents who either failed to present the offer,  or drug their feet so long that another offer came in & competed with the first offer!

We all have our busy schedules.  But professionalism would say that we should present the offer to the seller as soon as humanly possible.  (Isn’t that in the seller’s best interests?)  We should not proceed with our personal lives and delay the presentation for days ...just to see if an offer that we might prefer comes in.

The seller also has his busy schedule.  But the Listing Agent should still attempt to present the offer in a timely fashion, reminding the seller that the buyer might find another house and go away.  ~It is bad manners to ignore an offer from someone who says they wish to purchase your house.  ...And it is worse than ‘bad manners’ for an agent to drag their feet just because their kids have a soccer game or something.

Some of you have set certain boundaries for your business, and declare that you only work during “office hours.”  That is certainly permissible for you to do, but the offer should still be presented at the earliest opportunity for you do so during the next business day.

What are our obligations?  ~We are all obligated to present each and every offer to the seller, without any other reservations.  —If the seller says don’t bother presenting low offers, then simply get him to put that in the Listing Agreement, in writing.  (or with a separate letter.)  The Listing Agent’s duties are to guide the seller, not make decisions for him.  You could simply call the seller and say we have a low offer…do you want to see the details?  ~Such action on your part shows him you are doing your job, and complying with the directives of TREC.

Mr. Ryon is entitled to his opinion, but it is not professional to tell other people that their opinions are “wrong” or “stupid”.  In this forum you may state facts or opinions, but it is not appropriate to be judgmental of your fellow agents.

Richard Ryon on 03/02/2016

Marti Eveliegh, I hope you are following this thread and can answer the following question. Of course, anyone else is invited to answer as well.
You stated that buyer’s agents in Texas have “the right” to present their offer to the sellers directly with the seller’s agent present. Where in the world does “this right” come from? Can you site me the statute or TREC rule where this right is promulgated?
Or where you expressing your opinion that this right should exist?
Remember, TREC and TAR have authority over licensees and members only. The idea that either organization can compel a seller, or buyer for that matter, to do anything is specious. This includes requiring sellers to meet with buyer’s agents.
Clients hire US to deal with the different personalities in a transaction so they don’t have to. If sellers don’t want to meet with you THEY DON’T HAVE TO! If a seller’s agent thinks a meeting with a buyer’s agent will be counterproductive they have every right, indeed the responsibility, to inform their client of same and recommend against the meeting. In which case a pushy buyer’s agent will have done a disservice to their client by making it an issue.
In short, if you want to present an offer to another agent’s client DO NOT make demands based on non existent rights. This will only alienate the listing agent and possibly produce a negative reaction from the seller.  Rather, show the listing agent that you will be respectful of the seller’s rights including their right to choose NOT to meet with you.
Finally, one of the reasons people hire us is because they prefer having a “go-between”, a definition for agency. They are paying US to deal with other parties including OTHER AGENTS. Arguing for requiring direct contact is arguing against agency. If you were successful, we would all have to get real jobs. STOP IT! sarc

Stephen Williams on 03/02/2016

Mr. Ryon is pointing out that too often agents hit this forum with their experiences only.  Either their routine, or that one time they’ll never forget.  Too often we don’t consider that in another arena, if may be wildly different yet also totally acceptable.

For instance, present all offers in person?  Seriously?  What if the offer is 50% of asking price, you and property are in Brownsville, and seller is in Amarillo?  And maybe throw in it’s a $10,000 asking price and maybe a $600 commission.  You’re going to travel across state to present that offer in person?

Richard Ryon on 03/02/2016

Standard of Practice 1-6 clearly says that agents must present all offers. The debate is how, who is allowed to be present, and whether sellers are “required” to evidence the presentation by signing or initialing a document. Remember that both TREC and TAR regulate licensees and members only. Neither can compel a seller to sign a verification that an offer was presented or sign anything else for that matter. So let’s get off this stupid idea of forms that sellers must sign.
Ditto for who attends the presentation. This CANNOT be dictated by TREC or TAR. It is the SELLER’S CHOICE who they meet with and whether or not there is a meeting at all. Their agent’s role is to suggest including the buyer’s agent OR NOT based on their assessment of the situation.  Then the SELLER CHOOSES! If the buyer’s agent is a paranoid bomb thrower I am going to recommend a meeting with only my clients and me. Why? My job as a listing agent is to SELL the PROPERTY. Personality conflicts between overly aggressive buyer’s agents and my sellers can kill a sale. I have had sellers that received a bad impression from a buyer’s agent at a meeting that made it harder to get their offer considered. And it was the best offer! Show me that you can be nice and I will recommend that my clients choose a meeting that includes you. And, while I always follow my client’s directions, they usually take my recommendation so be nice to listing agents if you want a meeting with their client. If you want to gather honey, don’t kick over the beehive (Dale Carnegie).
Also, many sellers do not care about all your sterling arguments about why your buyer is so wonderful. They only want an assessment of the offer from their agent. They employed their agent to represent them before ALL other parties including buyer’s agents. This is their right, RESPECT IT!
Offers should always be presented in person? This would require the seller to meet with their agent. Again, we can’t compel sellers.
When do I set things up to present an offer in person to my sellers? Whenever I have an offer that has a chance of making a sale! Bring me a ridiculous low ball offer on a well priced listing and I will probably start by presenting the offer over the phone. If my client says no, it ends right there. Otherwise, my client is going to wonder why I am wasting their time on a meeting for a garbage offer. That damages my relationship with my client. I don’t like that.
How do you know that the listing agent presented your offer “properly”? YOU DON’T! TOO BAD! The seller gets to chose their agent, good or bad, not you. Get over it.
And, if you think there is a breech of ethics report it to your Board! Going directly to the other agent’s client IS NOT ALLOWED, does even more damage, and will get you into hot water! Just ask Rick.

Irene Pence on 02/29/2016

I represent both Sellers and Buyers and I agree that ALL offers should be submitted to a Seller and that submitting all offers and acknowledgement by the Seller should be a TREC requirement.  I am not in support of Buyer’s Agents submitting directly to the Seller as this could open the door to abuse with respect to Amendments and other communications and I don’t think TREC would ever support that policy.  And, adding another form to the process is also not very efficient.  However, adding a new last page to the existing TREC 1-4 contract specifically for the Seller to acknowledge receipt of the offer and provide to the Listing Agent to return to the Buyer Agent would resolve this entire problem.  No additional forms or documents to include with the offer package, we have enough of that already.  While Sellers may not want to be pestered with ridiculously low offers,  I think they’d get on board if this were a TREC requirement knowing that it benefits the consumer, both Sellers and Buyers.

Chris Tesch on 02/27/2016

Somewhat scary that this is even a question.  In what way would it ever benefit a seller not to hear an offer?  Withholding an offer is a definite violation of code and the fact that an agent actually said that they wouldn’t is ridiculous.

Rick DeVoss on 02/27/2016

So, Marti, ...How do you make this happen when the Listing Agent will not agree?
If you try to present the offer without his/her cooperation, then you are accused of “going behind the agent’s back.”
TREC needs to make this rule clear to all Brokers.  The Buyer’s Agent has the right to request a scheduled appointment, and both the Seller and the Listing Agent have to cooperate.

Marti Eveleigh on 02/26/2016

In Texas, the buyers agent has the right to present the offer to the seller with the listing agent present.  No negotiations can be done, at this time, it’s simply the buyers agent presenting the offer to the seller.  Then the buyers agent leaves.  If you have a letter from the buyers, you can read it to the seller, along with the terms of the offer.
Isn’t done mostly because of time frames, and there are agents that don’t realize they have the right to present the offer and then there are listing agents that don’t know or want this to happen.

Doris Snipp on 02/26/2016

People keep suggesting there are forms that can be used for the seller to say he received the offer. The issue is the seller isn’t required to sign the form, therefore the Listing Agent doesn’t have to submit the form(s). The issue is make it a requirement that the seller acknowledges in writing that he has received the offer.

Tommie Easley on 02/26/2016

Thank you   Rick DeVoss
Well put ,  Exactly!!!!

Rick DeVoss on 02/26/2016

Being in the DFW area, I am not familiar with the HAR forms.
However, I think it is way past time that we had a form for written documentation that each and every offer was presented to the seller.  It does not matter how low the offer was, or what the Listing Agent thought of it.  The point is that we currently have No way of knowing if an offer was ever presented to the seller.

And “over the phone” isn’t good enough!  Let’s act like professionals, people.  ~What does it take to get the seller to sign a one-page form to say that he considered the offer and rejected it…??

(In the old days, we used to get the seller to initial across the first page of the contract if he wanted to reject it.)

Here’s the real question:  Why haven’t any of the governing bodies which keep an eye on agent behavior ever sent down a mandate that the Listing Agent has to document that they presented each offer to the seller?

I don’t want to hear what the seller said; I want to see it in writing!  If the seller instructs his agent to not bother him with offers below a certain price level, or offers which do not meet a certain criteria, then it should be easy for the Listing Agent to send a copy of that letter to the Buyer’s Agent.  ~If the seller’s agent doesn’t have those instructions in writing, then they are not valid.

And why does the Listing Agent have the right to say that the Buyer’s Agent cannot present his offer directly to the seller…?  Maybe we need to get over this culture of proprietary ownership of the seller, and move on toward facilitating the transaction.

What would be wrong with mailing a copy of the offer to the seller, and sending a ‘carbon copy’ to his Agent…?  ...Then if he has questions about it, he can communicate with his agent.  And once he has decided to counter or reject or accept the offer, then he can pass it back through his agent.  —-If this were common practice in Texas, we would not even have a question about whether or not the offer was presented to the seller!

 

Mary Anne Tyler on 02/26/2016

Some Boards create their own forms.  For example, HAR (Houston Association of REALTORS) has a form called Evidence of Presentation of Earnest Money Contract.  The Seller signs an ackhowledgement that is short, sweet and to the point.  Maybe your board could create one.

Stephen Williams on 02/26/2016

I am of the opinion that we should always “present” offers, because that can accomplish various things beyond contracting.  First, it can show your seller that you’re working.  Second, it can (possibly) show your seller what the market thinks the value is.  For instance, even if the seller said, “don’t present any offers less than 80% of asking price”, if you are repeatedly getting offers a 70% of asking, wouldn’t that be a handy thing to share with your seller?  Finally, it keeps you in contact with seller, which is always good.  I would think you could present that 20% of asking price offer with a simple phone call to the seller.  More reasonable offers might warrant a sit down.

I would also add that I believe the editorial staff comments might have again committed some “lazy talk”, which is frustrating as apparently many people use this forum for training a/o legal advice.  (Whether they should or not.)

“The only situation in which not presenting the offer would be acceptable is if the seller gave the listing agent explicit instructions to not present offers below a certain amount.”

What if the seller said to be considered, an offer must be accompanied by a prequalification letter?  What if seller said I will not consider selling just 1 acre with the house?  There are several reasons beyond price or “amount”.  In fact, many of those are more absolute than price.  It would have been more appropriate to say, “The only situation in which not presenting the offer would be acceptable is if the seller gave the listing agent explicit instructions to not present offers ***that don’t meet certain parameters***”

Stop with the lazy talk!

Cheyenne Taylor on 02/25/2016

With the mountain of paperwork we already have to utilize for a long list of situations I would welcome a simple one page form required to be presented to the Sellers with every offer that requires them to respond back to the Buyer (Tommie Easley’s form works for me) so that when one is representing the Buyer your Buyer can be sure their offer was submitted to the Seller.  It’s not rocket science, sadly there are those who seek to serve themselves first.

Suzanne Seefurth on 02/25/2016

Present ALL offers to your seller client.  Prepare a Estimated Sellers Net sheet with each offer to help the seller in determining their highest and BEST offer.  Discuss the dynamics (earlier closing dates to fit the sellers or buyers needs, seller contributions,  contingencies, etc).  It doesn’t get any simpler than that.  It should be the Sellers decision on which offer to take… not the agent.

Robert on 02/25/2016

I can tell some of y’all don’t speak with the info-mercial/get-rich-quick educated real estate investment crowd very often.  I’ve had listings get so many stupid, obnoxious, hair-brained offers that I started specifically asking my clients “At what price threshold do you want me to communicate offers to you?”.  You get offers for 20% of ask price, and it will make you upset also.  Its just a waste of everyone’s time.

Trey Mills on 02/25/2016

You present all offers to your principals.  That low offer may make you the hero vs the zero especially for those sellers who didn’t believe your knowledge of actual sales pricing.

David Moore on 02/25/2016

Buyers agent can request to present offer directly and in person to seller and sellers agent if necessary

James DeBerry on 02/25/2016

Listing agent beware… While buyer’s agents may be restricted from speaking directly to your seller regarding an offer they made on your listing, don’t be surprised if your words “I’m not going to present this offer.” triggers the agents buyer to “happen” to be in the neighborhood and “happen” to stop by the property right when the seller is (let’s say) watering their lawn, and “happen” to (let’s say) mention that they made an offer through their agent and submitted it to you only for your seller to happen to call you wondering about that “other” offer that he/she never got from you… Stranger things have “happened”...

David Brock on 02/25/2016

There is a form dedicated to this.  It’s called Seller’s Invitation to Buyer to Submit New Offer.  This form can be used in many ways and is more diplomatic then to simply reject an offer.  There are so many agents jumping into the business these days because of how hot the market’s been.  It gets very frustrating having to educate agents on the process, the proper forms to use, timelines, etc.  I had to educate another broker recently regarding the new 5 PM deadline for notice under the option to terminate.  She still thought it was midnight.

Beverly Godbey on 02/25/2016

TAR-1926 should work for this situation

Linda Maier on 02/25/2016

I believe the basic form does exist in the HAR library on ZipForms…It’s called “Evidence of Presentation of Earnest Money Contract” and is to be signed by the Seller to acknowledge receipt of the offer.

Tommie Easley on 02/25/2016

I understand what the blog was about and yes it would be a violation but my
remark was about the being able to document in writing whether or not the seller actually received the offer and viewed and the instructions the listing agent received all I meant was I think we need a form to prevent speculations of whether seller received or not Sorry about that

Tommie Easley on 02/25/2016

is if the seller gave the listing agent explicit instructions to not present offers below a certain amount in writing there could be a form like fill in the blank for the sellers :

offer presented ______________

accepted offer provided with changes :______________

rejected:__________________

please resubmit:______________
sort of like that

Felicia Peters on 02/25/2016

What an excellent point!  I understand that not all agents understand that when they do not present an offer it IS a violation of Standard of Practice Code 1-6.  I have heard from folks who are shocked after their home didn’t sell that they met someone at a function and learned that a buyer had proffered an offer and they never knew about it.

Doris Snipp on 02/25/2016

Right on Tommie. Ever get the feeling that some items seem to be seller biased?  Texas history shows at one time everyone represented the seller’s interest. We were many times sub-agents or listing agents. I think we need several areas addressed for a true unbiased representation of all parties.

Tommie Easley on 02/25/2016

I believe that we need a form for all offers with buyers names and the day the offer was submitted to be accepted provided or rejected due to.

Doris Snipp on 02/25/2016

Where it states:
(The only situation in which not presenting the offer would be acceptable is if the seller gave the listing agent explicit instructions to not present offers below a certain amount) I would add provides in writing.


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