MULTIPLE OFFERS – A REMINDER

January 26th, 2013 at 7:30 pm

As we discussed last week, we are seeing a lot of multiple offers throughout the Company. With that fact in mind, I have begun getting calls about our agents’ handling of these transactions. Specifically, I have gotten a number of calls from outside brokers who claim that their client’s offer for our listing did not get properly presented to the seller. Invariably, in every case where this call comes in, a buyer represented by our listing agent ultimately got the property. In these transactions, the unsuccessful offerors obviously think that something was amiss in the process and that their offer did not get a fair shake. Given the increase in these complaints, I wanted to remind you of our policy in this regard.

Specifically, if you represent the seller of a property with multiple offers, and you also represent one of the potential buyers, you have to get your manager involved in the process. You need their help because this situation presents a clear conflict of interest for you. After all, you have a fiduciary duty to the seller to advise them about the subject offers, and to give that advice with ONLY their interests in mind. Unfortunately, you also represent one particular buyer and therefore have to look out for their interests. As importantly, with a potential dual agency, you also have your own interest to consider, since you would make extra money if your buyer gets the house. Of course, that interest may conflict with the seller’s, since it is possible that your buyer does not make the best offer for the property. As a result, in order to eliminate both this actual conflict and the appearance of impropriety, you need to remove yourself from the offer process. Get your manager involved and let them “represent” the seller until an offer is actually accepted. When this happens, all offers would be forwarded to your manager, who will then present them to the seller and answer his/her questions about each. Any advice regarding which offer is “stronger” or “weaker” will come from the manager. That way, you are not tempted to steer the seller to your buyer, and the advice being given is not impacted by the conflicts you face. After an offer is accepted, your manager steps away and you handle the rest of the deal on behalf of the seller, even if your buyer gets the property.

By removing you from the offer process, this policy eliminates both of our problems: the potential conflict between the interests of the seller, your buyer and yourself and the appearance to other buyers and agents that you are improperly influencing the seller’s choice. So please remember this policy and involve your manager in multiple offers when appropriate. It will save us all a lot of problems down the road.

As always, if you have any questions, please contact your manager so they can (1) clarify this policy for you or (2) contact the legal department as needed.

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