Attorney Bruce Aydt, ABR, CRB, SRS, is a national real estate educator, a Missouri real estate broker, and past chair of the NAR Professional Standards Committee.
You can send him your ethics questions at firstname.lastname@example.org.
Q. I was in the middle of negotiating an offer on behalf of buyers I was representing. We had submitted a counteroffer in writing to the listing agent and we were waiting for a response. Suddenly, the listing agent contacted me and told me that there were multiple offers on the table. She said her seller instructed her to tell us that we needed to make our "best and final offer" by a certain time that day. This doesn’t seem fair to me. I feel the sellers should have completed negotiations with my buyers before considering another offer. Is the listing agent in violation of the Code of Ethics?
A. No. Considering several offers at the same time or asking one or more potential buyers to make their "best and final" offer by a specific deadline doesn’t violate the Code. The listing agent and the seller had the right to ask that your buyer submit a "best and final offer." While individual sellers may use that practice infrequently, it seems more common in situations requiring a quick sale, such as relocations and properties sold by lenders. Because these properties are often attractively priced, they can generate multiple offers. Standards of Practice 1-6 and 1-7 of the Code address offers and counteroffers. Standard of Practice 1-6 provides "REALTORS® shall submit offers and counteroffers objectively and as quickly as possible." Standard of Practice 1-7 states, "When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counteroffers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing . . ."
No provision of the Code requires that parties negotiate the first offer received to a conclusion before they consider or act on other offers. What happened in your situation is that the seller rejected your counteroffer and requested that your buyer resubmit a new offer that included your buyer’s "best" terms. In those circumstances, it’s up to the buyers to decide whether they will make another counteroffer.
If your buyers don’t submit a new counteroffer, the seller will have lost the opportunity to consider their previous counteroffer. That’s something the listing agent should have explained to the sellers before they rejected the counteroffer and called for "best and final" offers. Your expert negotiating advice about their choices can help your buyer clients achieve their objectives.