Realtor® Attorney Joint Committee

Multiple Offers: Obligations and Ideas

By: Michael T. Hankin, Board Certified Real Estate Attorney, Hankin & Hankin

In our roaring seller’s market, multiple offers on a listing are the new normal. However, with a great number of offers, comes great responsibility. In this short article, we’ll first define what your minimum obligations are as the listing Realtor® in this situation and discuss some practice tips for handling multiple offers.

LISTING AGENT OBLIGATIONS

Pursuant to Florida Statute §475.278, every licensed real estate agent in the state is presumed to have a transaction broker relationship with the parties to the transaction. As a transaction broker, the agent is obligated to “present all offers and counteroffers in a timely manner” and “deal honestly and fairly.”

The obligation to timely present offers is crucial when there are multiple offers in play. All offers should be submitted (unless the agent has been directed otherwise in writing) for the seller’s consideration, even if an offer is obviously inferior to others received. It must always be remembered that it is the seller’s decision on how to respond to each offer. The diligent buyer’s agent is permitted to check if their offer was presented to the seller under the National Association of REALTORS® Standard of Practice 1-7 which requires the listing agent to confirm the presentation of their offer at the buyer’s agent’s written request.

The obligation to act honestly is equally important. Any opinion of the offers should be based on objective criteria and any benefit to the agent of selecting one offer over another should be thoroughly disclosed, explained, and documented. There is no legal requirement to utilize any specific method in responding to a multiple offer situation and many different strategies have been implemented, some of which are discussed below. and will include a methodology of organizing and evaluating the offers and a plan on how to respond.

Typically, spreadsheets have been utilized to organize and evaluate multiple offers, however, several recently developed online solutions from ShowingTime® and Propy® show promise.

Once a seller receives multiple offers, they may choose to: 1 | Solicit the highest and best offers from some or all of the prospective buyers, 2 | Negotiate/counter offer with one buyer, or 3 | Wait to make a decision and/or receive additional offers.

It is critically important that the seller does not make counteroffers to more than one buyer at a time as doing so may inadvertently obligate them to sell their singular property to more than one person. If negotiations fail or stall with one buyer, the listing agent should ensure that any outstanding counteroffers from the seller have expired or have been properly revoked before moving onto a new potential buyer.

Join the Realtor® Attorney Joint Committee for a seminar discussing multiple offers at RASM South on April 20, 2022 at 1:30 p.m. •

PRACTICE TIPS

The first and most important thing an agent can do is to have a plan in place prior to the property hitting the open market. That plan should be agreeable to both the agent’s broker as well as the property owner

This article is meant for educational purposes only. It is not intended to serve as legal advice and should not be used as a substitute for consultation with an attorney.