Attorney Bruce Aydt, ABR, CRB, SRS, is a national real estate educator, a Missouri real estate broker, and past chair of the National Association of REALTORS® Professional Standards Committee.
Who Makes the Offer?
Buyer’s agent wants to speak for herself.
August 1, 2007
Q: A buyer’s agent has requested that she present her buyer’s offer on our seller’s listing (with us present, of course). I think such a request is within the agent’s rights, although our seller didn’t like the idea. What does the Code of Ethics say?
A: Although this situation isn’t specifically addressed in the Code of Ethics, the NATIONAL ASSOCIATION OF REALTORS®’ Multiple Listing Policy does address it. MLS Policy Statement 7.73 provides that “Cooperating participants or their representatives have the right to participate in the presentation of any offer they secure to purchase or lease to the seller or lessor. They do not have the right to be present at any discussion or evaluation of the offer by the seller or lessor and the listing broker.
“However, if a seller or lessor gives written instructions to a listing broker that cooperating brokers may not be present when offers they procure are presented, cooperating brokers have the right to a copy of those instructions.” So if your sellers oppose the presentation by the buyer’s agent, they’re within their rights provided you give the buyer’s agent a copy of sellers’ instructions to that effect.
With that said, although it’s not common practice in many markets to have buyer’s agents present their buyer’s offer, it makes sense to me from both the buyer’s and the seller’s perspective. Article 1 of the Code of Ethics requires REALTORS® to “protect and promote” the interests of their clients. For buyer’s agents, this obligation might mean putting their client’s best foot forward by presenting the offer to the seller and listing agent or broker personally. For the seller’s agent, having the buyer’s agent present the offer could actually advance the seller’s interests because the buyer’s agent would be able to explain the buyer’s issues directly to the seller and listing agent or broker.
Q: I received an offer from a buyer’s agent on one of my listings. Subsequently, I was contacted by a second agent who asked if there were any offers on the listing. As I had the seller’s approval, I informed the second agent that I’d just received an offer. The second agent asked me to disclose the terms and conditions of the offer. I told the second agent that in accordance with Article 1 of the Code of Ethics, I could do so only with written approval from my seller client.
My interpretation of Standard of Practice 1-13(5) is that buyer’s agents must inform their clients that the terms of their offer may be shared with other potential buyers. In my opinion, this Standard of Practice shouldn’t be read as encouraging REALTORS® (buyer’s agents) to disclose details of offers to other REALTORS® or their buyer clients.
A: You’re correct in your understanding of Standard of Practice 1-13(5). This standard sets out five issues buyer’s agents must discuss with their potential buyer clients when entering into a buyer representation relationship. One of these is “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.” Without one of these limitations, it isn’t a violation of the Code of Ethics if seller’s agents follow the legal instruction of their seller client to disclose the existence and terms of any offers.
That said, it should be understood that nothing in the Code encourages or requires such disclosures. The old saying “just because you can doesn’t mean you should” is relevant here. A seller’s agent should carefully discuss negotiation options with the sellers so that the sellers understand whether disclosure is in their best interest. For an excellent, comprehensive discussion of negotiating multiple offers, see Appendix IX to Part Four of the Code of Ethics and Arbitration Manual, “Presenting and Negotiating Multiple Offers.”