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 email@example.com.
Question: Why do some real estate practitioners and buyers insist on presenting offers verbally? Shouldn’t all offers and counteroffers be in writing? Is presenting an oral offer a violation of the NATIONAL ASSOCIATION OF REALTORS® Code of Ethics?
Answer: Verbal offers may not be encouraged, but they’re also not a violation of the Code. Presenting an oral offer from a buyer is within the concepts of the Code. Standards of Practice 1-6 and 1-7 talk about "offers and counteroffers" yet don’t specify "written" offers or "written" counteroffers. Standard of Practice 1-6 states, "REALTORS® shall submit offers and counteroffers objectively and as quickly as possible." And when you’re acting as the listing broker, Standard of Practice 1-7 says you shall "continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing." Neither of these requires the offer to be in writing before the obligation to present the offer arises.
However, Article 9 states that an agent’s obligation is to have agreements in writing "whenever possible." "REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing…"
Taking these three parts of the Code together, I think it’s safe to say that written offers are always preferable. However, Article 9 is a flexible requirement because of the phrase "whenever possible." And because Standards of Practice 1-6 and 1-7 do not limit presentation of offers to those in writing, my conclusion is that all offers must be submitted—whether in writing or in the spoken word—but the fact that an offer is done verbally is not a violation of the Code. While it is possible that your state license law may limit presentation of offers to written offers, the Code does not make that distinction.
Send your ethics questions to ethics@REALTORS.org.