Multiple Choice Question: You are the buyer’s agent who has just submitted an offer. Under what circumstance can the seller use a Seller Multiple Counter Offer (SMCO), instead of a Seller Counter Offer (SCO)? Pick the best answer:

A. As long as the seller has received another offer.
B. As long as the seller has received another offer that has not yet expired.
C. As long as the seller is using an SMCO for another buyer.
D. The seller can use the SCO and SMCO interchangeably. 

Answer: Answer A is not the best answer. In an SMCO, the seller merely represents to the buyer that the “Seller is making Multiple Counter Offers to other prospective Buyers on terms that may or may not be the same as in this Multiple Counter Offer.” The seller makes no actual representation as to whether the seller has received any other offers.

Answer B is not the best answer either. Again, in an SMCO, the seller makes no representation as to whether the seller has received any other offers, or whether those offers have or have not expired. It may seem logical to assume that the seller must have received another offer before the seller can use an SMCO, but technically speaking, the SMCO does not say that.

Answer C is the best answer, because that’s what the SMCO essentially says. Unfortunately, however, the SMCO phrase, “is making Multiple Counter Offers,” is ambiguous. The verb, “to make,” has been conjugated into a present participle, which connotes some sort of ongoing action, but the SMCO provides no actual timeframe for that ongoing action.

Let’s say, for example, that the seller receives our buyer’s offer in the morning, and uses an SMCO for us, because the seller and listing agent already know they will be getting another offer that very afternoon. We don’t quite know from the language of the SMCO exactly when the ongoing action of “is making” actually ends, e.g. whether it extends to the afternoon.

Of course, for listing agents, best practices dictate that you use an SMCO only if you have already received another offer that your seller intends on countering. Even for the situation where you know you will be getting an offer from Buyer #2 in the afternoon, it’s easy enough to just clarify in the SMCO for Buyer #1 that, where it says, “Seller is making Multiple Counter Offers,” what the seller means is that the seller expects to receive another offer in the afternoon.

But as the buyer’s agent, if you believe that the seller’s side is using an SMCO, even though the seller has no other offers, you should just inform your buyer accordingly, and let your buyer decide what to do. Some buyers may instruct you to ask the listing agent what’s going on. But many buyers in today’s market may opt not to do anything, so as not to jeopardize their chances of getting their offer accepted.

Answer D is not the best answer. It would seem dishonest for a seller to use an SMCO absent any present intention of countering anyone else.

-Thank you to Cherie Seller (Tustin Office) for suggesting this week’s legal tip!

Copyright© 2022 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of April 25, 2022. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.