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.
Question: When a listing agent has received multiple offers, what can or can’t be disclosed to a buyer’s agent? Does the REALTORS® Code of Ethics say listing agents can’t disclose the details of the other offers unless all parties involved are given the same information?
Answer: Article 1 and its Standards of Practice provide guidance on multiple offers. Article 1 has two primary obligations. First is the requirement that REALTORS® “protect and promote the interests of their client.” Second is the “obligation to treat all parties honestly.”
Standard of Practice 1-15 addresses REALTORS®’ obligation in multiple-offer situations: “REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property.” This Standard of Practice clearly requires disclosure of the existence of multiple offers, with the seller’s permission, if a buyer or cooperating broker asks about the existence of multiple offers. Standard of Practice 1-13 is directed to the issue of disclosure of terms of offers. “When entering into buyer/tenant agreements, REALTORS® must advise potential clients of: . . . 5) 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.”
In other words, terms of offers can be disclosed to competing buyers or their agents by sellers or seller’s representatives unless there are laws or confidentiality agreements that specifically prohibit that disclosure. Confidentiality agreements between buyers and sellers are more common in commercial transactions than in residential transactions. Where state license laws prohibit the disclosure of terms of competing offers by real estate licensees, parties specify what permissions their agents have to disclose either the existence or terms of offers.
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