Multiply Offer Mistakes to Avoid
We can all make mistakes at times, some mistakes just carry with them more severe repercussion than others.
Certain professions come with a higher level of responsibility and accountability than others. Two of obvious professions that come to mind are that of Doctors and Pilots. Mistakes in their field could have catastrophic consequences.
But what about a real estate agent’s fiduciary duties? A fiduciary is a person who acts on behalf of another person putting their clients’ interest ahead of their own. Being a fiduciary thus requires being bound both legally and ethically to act in the another’s best interests.
When representing the seller, it’s a duty of the agent to get the seller the most amount of money for their home. Why thendo so many agents fail this simple test?
We’ve represented buyers on many occasions where multiple offers were involved. The agent representing the seller—also referred to as the Listing Agent—collects all of the offers and presents them to the seller who gleefully accepts one, typically for far more than what they had expected.
The listing agent then contacts each buyer’s agent (also referred to as the selling agent), who did not succeed in the offer process, informing them of the seller’s decision to accept another offer. Everyone walks away happy, except of course the buyers and their agents who lost out.
Did the Listing Agent fulfill their fiduciary duty? Not really.
Should the listing agent suggest to the sellers that perhaps they should proffer a counter offer to all buyers to see if any might go higher in price, or better their terms? Probably not. We avoid this approach, since delivering a counteroffer nullifies the original offer. In other words, if the buyer balks at the counteroffer, and the seller then chooses to accept the original offer, it’s too late. The original buyer’s offer terminated when the counter was delivered by the seller to the buyer.
So how should an agent help get their seller the most amount of money, without jeopardizing their current position?
By collecting any offers prior to meeting with the sellers, we’re able reach out to each agent with feedback as to where their offer stands, in relation to the other offers received.
We also take this time to contact every lender to ascertain the strength of each buyer’s financial position to avoid lending issues down the road.
This gives the buyers a chance to better their offer, if they so desire, while eliminating the pitfalls inherent with counter offers for the seller. It ensures that the sellers are getting the highest and best offer, with the best terms.
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The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.