Help! My offer price (best so far) has been disclosed by the seller (bank)'s agent!

The agent is working in his client's best interest. Although possibly creepy, likely not illegal.

How long has this house been on the market? Often I have seen houses that say (in agent only notes) that offers will be reviewed on "x" date (sometimes 1-2+ weeks out), then they will schedule an open house or two. So they do the best they can to encourage multiple offers & drive the price up. This tactic was really popular in Seattle circa 2006. Price low, hold 1-2 open houses & review all offers a couple of weeks out to encourage a bidding war. Laws vary from state to state, but usually an agent can disclose offers they have (I have even had agents fax them to me to "prove" that I needed to up the ante if my client wants the property). An agent is legally bound to their client's best interests. If you were selling a house wouldn't you want your agent getting buyers all riled up in a bidding war? (Of course, this tactic can also backfire in very unpleasant ways, which is why it isn't extremely prevalent in the marketplace)

Do you have an agent? They should be able to get more info on the property and see the agent notes that should (but may not) give info on the review timeline.

If you offer has an expiration, that may be the best "weapon" you have to fight back. If not anf you want the property, the ball may be in their court.

oops, "and" not anf....no spell check :(

Tiffany, thank you so much for your professional opinion.  I'm in California. This is the first weekend since the house has been put on market. You are right, at this stage the seller's agent can do an open house. I have an agent.  But the seller's realtor said in the open house that the offer accepting deadline is this comming Wednesday.

Can you elaborate on using offer expiration date as a weapon? I doubt my offer will have any bargain power tomorrow, because I've heard at least one couple has decided to make an offer after seeing the open house, which will beat my price for sure (They'ver heard the best current offer). The agent has sccessfully encouraged a bidding war! Looks like if I want the property, the only thing I can do is raising the price (and not a little) again. IS that right?

thanks for sharing your insight on this game, TiffanyBond. 

That is sleazy and should not be allowable. Period.  Actiing in the best interest of the client, perhaps that agent got them into the house that is not in foreclosure, how about that for irony.  Best of luck to you Orange Hammer, I don't blame you for being irate.

*that is now in foreclosure*

I have to question the ethics of the Agent.

But Tiffany is right, unless your State Law or State Real Estate Regulations doesn't prohibit this practice the NAR code of ethics doesn't prohibit this action either. 

Although I detest the action, at the very minimum the Agent should disclose all offer prices to all offerors.  That's even playing ground, instead of just telling people who's offered the highest price.

I don't see what there is to complain about.  They're trying to get the best price for the property.  It seems they were successful.  You could always have them a 48 hour deadline to prevent this type of thing.

Unfortunately, at this stage it looks like the buyer's agents in this hand lost. So I went through a lot of these situations in 2006, particularly in estate sales where there is little to no emotional investment in a property and the goal is to sell the property immediately and for the highest price on that timeframe (which is probably also why it works in foreclosure). The idea is for the market to set the price. So you open the bidding super low, get buyer's excited and in theory (and sometimes in practice) they bid the price up to what the market should be - or more. The buyer that most values the house wins. It is an economically efficient theory; not an emotionally compassionate one.

It really isn't sleazy, it's a different way to play ball. It's very smart of the seller's agent - if it works. It sucks if you are a buyer and it is a bold move in this market, particularly in California. I'm actually a little surprized to see it in practice there, but obviously it worked. In many ways it is a more fair way to run the game in a multiple bid situation. Usually everyone puts in their offers with escalation clauses and usually the highest bid wins (sometimes there are other factors, such as: large earnest money, shorter closings, all cash buyers, etc, that take the house for less if the seller feels like it is a better overall package). Once I had the "high bid" in one of these situations, but I absolutely refused to write up the offer with a $20,000 non-refundable deposit without getting through financing (I was concerned about appraisal for my buyers) and we were not selected as the buyer...which is good since my client would have lost the $20k or had to come up with another 50k cash since the property ended up appraising low. However, this process frequently has a lot of transparency and the "courtesy" of a last look bid. So the "chosen" bid from the initial round is called in to all the other bids to match or exceed. And there is nothing in the process that forbids an agent from disclosing other offers. Agents are compelled by law to share many negative factors about property (if aware), so I don't see why should be illegal to share factors that make the property more competitive. Obviously, agents don't share intimate details of lowball offers...it isn't in their best client's best interest, but sharing one that is acceptable and on the table in an effort to get an even more desirable offer is kosher - it's a little like ebay with an agent.

Tntnk: If the offers are in already it is a little hard to play poker. The best way to handle these scenarios is to wait until the deadline to submit with an escalation clause or an agent with a gift for gab that can endear the other agent to him/her. If you put an offer in way early when it is clearly stipulated, of course the other agent will shop it. Your agent should have cautioned you against this. If it was in the agent notes about the deadline, then there isn't much you could have done to counter the deadline, since once published it is usually binding that they need to wait to accept offers until that date/time. As I mentioned before, price is frequently not the only factor. Have your agent call & do some poking around. A higher offer with shaky financing may have them go to second bidder. They may have some timeframe issues they want met or contingencies they are not willing to entertain. Is your agent good at small talk? The longer they can keep the other agent on the phone, the more likely they are to get the other agent to share this info.

As a footnote....this type of sales tactic can bomb horribly. I have seen agents list something 50k or 100k below what comps would dictate and get ...crickets. Then you have a property you aren't willing to negotiate on and that is listed for less than you want to accept; if you raise the price, it shows up and that starting number never goes away. The inital price has to be really, really low in a bunk market like this to work. It is a huge risk that often doesn't pay off.

Chutta:

Part of me agrees with your statement that they should disclose all offers if they are going to disclose any...but in many circumstances it would not be in their client's best interest and a violation of ethics. I guess it comes down to having a buyers agent that comps out the property well enough to help the buyer determine their ceiling price. If they get it for that price or less, great - if not, there are lots of other houses in this market.

"an escalation clause or an agent with a gift for gab that can endear the other agent to him/her"

LOL!

tntnk -

1.  If it's an REO prperty then most likely your offer will get shopped.

2.  Because "banks" have been moving so slowly, a quick expiration date on your offer doesn't help.

3.  You were already asked for your "best & final" offer and you made it.  Now you're getting played, now you're thinking of increasing that offer, is that really in your own best interest?  Or are you just getting caught up in the bidding frenzy?  Like so many people did over much of the last 5-years.

4.  Simply withdraw your offer (you can do that at any time since it hasn't been accepted) and move on.

5.  If you make an offer on a non_REO property, ensure that the sellers are "in town" (available to recieve and review an offer), make the offer in the morning and give the offer an expiration of 12-hours.  You want to try and keep the listing agent from shopping your offer, while giving the sellers enough time to receive and review the offer.

Good Luck.

fill out a "multiple offer disclosure"

Nice way to cover their themself from lawsuits... but did the agent disclose what the other offers were in a written statment and verified or was it verbal and not verifible. 

Maybe a letter to local FBI office (RE Fraud division)... will change their minds. 

Mikal:

I agree that it is best to avoid these sort of sale all together. It is tough to come out a winner on the buyer's end. Although, I have come out on top by getting the agent's vote as the best offer without actually being the highest offer before. Depends on the agent; depends on the seller.

Nice way to cover their themself from lawsuits... but did the agent disclose what the other offers were in a written statment and verified or was it verbal and not verifible.

Tiffany,

What Space said above is what I am more concerned with in the releasing of the offer price.  From OP it sounds as if it was a verbal exchange, and there is nothing protecting the consumer from outright lies.  To release the information in many ways could be ok if the data released is verfiable and shared with all interested parties.  Since a mechanism is not in place to verify everything the Agent says in regards to release of data, that is what I specifically take issue with.

Confidentiality contract could be requested before the offer is sent. You would have to check with an attorney, I would have it signed by all parties.

Just thinking out loud.

Even playing ground? Sleazy agent?  If you were the ones Selling the property instead of buying it, you will be singing the praises of the agent for getting multiple offers.

The agent has done nothing illegal or unethical. They are doing their job. Please call NAR and the FBI and tell them that the Seller's agent (NOT YOUR AGENT) shopped your offer, and listen to the silence as they try to figure out why you called. The Seller can authorize the agent to disclose ALL offers, some of the offers, none of the offers, etc.  The agent may not even have a choice in the matter because they are following their seller's instructions.

This is simply the way the game is played. Why shouldn't he disclose the best offer if someone is willing to pay more than you? I do not understand this thread at all.

Unless there is language otherwise in your offer, there is nothing illegal about this, because the agent is representing the Seller's best interest.  I often write language such as "the terms and conditions of this offer shall not be revealed to any parties not directly involved in the transaction".  This way if the agent reveals your offer, you may have legal recourse.  Without such language in an offer, the Seller's agent can pretty much disclose your offer to anyone. 

Chutta:

It doesn't have to be verifyable...and it can even be a bluff. But if their bluff gets called, then it isn't in their sellers best interest. An agent can't directly lie about the property (ok, well they CAN, but it's an ethical violation and potentially illegal). An agent can exaggerate and euphemize to their heart's content. How many times have you read "cozy living room" (where the heck does a couch go?), "loads of potential" (bring a bulldozer!), "mature landscaping" (overgrown), etc? Having an offer on the table and telling other buyers is perfectly kosher, as is sharing the range or even the exact details...calling it "substantial" instead of "lowball" may help you or hurt you. It really depends on how well you know the market, your seller, the buyer's agent, and the buyer.

An agent isn't there to just typing into a computer the parameters of a house search, it's getting all the nuances of the game. The process of getting a real estate license teaches you how to write up a contract, some legal terms and not to go to jail...maybe slightly more in a state with high licensing requirements. Buying, selling, negotiating, doing detective work, knowing about house structures and neighborhoods - it's a profession. It's why people hire us. It's why we are worth our 6, uh 3, uh 2.1...hmm add in uncle sam 1.05% less expenses.

The style we are talking about in this string is an interesting sales tactic. I have dealt with it from the buyer's end and I understand the game. When I list properties I don't play that game. I feel like it is too risky for my sellers, that are almost always a client as a buyer. It is possible I might play the game from the seller's side if I had someone where the risk wasn't a problem (a bank or an estate sale) - not my typical client. Plus, real estate karma is a b*itch and frequently verbatim.

It doesn't have to be verifyable...and it can even be a bluff. But if their bluff gets called, then it isn't in their sellers best interest. An agent can't directly lie about the property (ok, well they CAN, but it's an ethical violation and potentially illegal).

You are basically saying that it is o.k. for a Real Estate Agent to lie?  An agent can't directly lie about the property (ok, well they CAN, but it's an ethical violation and potentially illegal). That sentence makes no sense.  An Agent can't like.  No they CAN, but its illegal.  That's probably the problem in a nut shell.  You are not sure if its ok for you to break the law to sell your clients house.

http://www.aaronline.com/documents/2008CodeEnglish.pdf

The above is a link to NAR Code of Ethics 2008

ARTICLE 1 (The very first Article of the NAR Code!)
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)

You might want to reconsider your stance that its ok to lie so that you can Seller's house.  NAR does not agree with you.

Its

Please view specifically section C.  Realtor shall not knowingly, during or following the termiantaion of professional relationship with their client.  Section C allows you to reveal information about your client if it is known that the Clients intent is to commit a crime.  By lieing about price of contract submitted, you are assisting your client in committing Fraud. 

 • Standard of Practice 1-9 (Nar Code of Ethics)
The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:
1) reveal confidential information of clients; or
2) use confidential information of clients to the disadvantage of clients; or
3) use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) REALTORS® are required by court order; or
c) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
d) it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)

Chutta:

I wasn't saying it is ever ok to lie when selling a house...I was saying it's possible someone may choose to lie (which doesn't make it right, ethical or legal). What I would do and what happens in the industry are two different things. I don't think we are in different places Chutta; I am explaining what can happen not what I do. I don't care for the particular game we are talking about in this string, but overall it isn't illegal. And it doesn't mean that buyer should be denied an education in how the game works. The offer information is only "confidential" if the seller doesn't approve of it being shared. The seller can choose to have the information shared, either in a vague manner or all the way up to having the offer faxed out to the other interested parties. Saying you have a "substantial" offer is not a lie if you have an offer on the table. Saying "there is a high level of interest in gthe property" isn't a lie if you have interest in the property. It is more like stating you caught a fish this big "-----------------------------". Again, I do not suggest engaging in this behavior and I reign in my euphemisms - but it is common in the industry to behave in this manner and not necessarily illegal.

Also, not every agent is a realtor. Although standards vary state to state, and the state ethical requirements are similar; the NAR club rules are not the legal rules.

not necessarily illegal

That's just too funy.

not every agent is a realtor

Yes but if you are a Realtor you must follow the code of ethics, if not there are consequences.  By sayingnot every agent is a realtor in regards to the question at hand, you imply that its ok to 1) lie about having offers or the price offered, which could be interpreted as the agent (seller) is attempting to commit fraud against the buyer, by enticing them to pay more based upon lies.

The argument is no longer whether or not you can disclose the amounts offered.  Actually NAR code of ethics has a section for that.  You may disclose the information only with written authorization from the Client.

The bigger question or point that you have posed is the legality of lieing to potential buyers about the existence of other offers and the price that they are offered at.  You seem to be saying that its ok to lie about having an offer and the price (while you find it disagreeable, you seem torn on whether it is illegal or not).  My interpetation of your comments might be wrong, but that's what it sounds like.  My contention is that any lie told by Agent to try to get more money out of Buyer for the Seller is a form of fraud an illegal in all 50 states (of course to differing degrees of severity for the crime).

kind

kind

of

kind of got off track and forgot my 2nd point. 

LOL Chutta.

Tntnk,
The best way to prevent your offer from being disclosed to anyone would be to add a “Non-disclosure” agreement as an addendum to your purchase contract.

If my sellers give me permission to disclose offers to potential buyers then I can and advise them that we may receive a request to provide written verification.

The bigger question or point that you have posed is the legality of lieing to potential buyers about the existence of other offers and the price that they are offered at.

If you have other offers, it is not illegal to say you have them, to make opinion statements about them (e.g. we have a "solid" offer on the table), state a range (e.g. we have an offer in the mid-300s), or even say the offer is 352k (if that is indeed the offer). You can even say we have an offer at 352k on the table, but are concerned about the closing date, financing, etc (if it is ok with your seller and there aren't any confidentiality terms in the contract; most template contracts do not have them). Some agents push these boundaries more than others; some kiss the line; some cross the line.

My interpetation of your comments might be wrong, but that's what it sounds like. My contention is that any lie told by Agent to try to get more money out of Buyer for the Seller is a form of fraud an illegal in all 50 states (of course to differing degrees of severity for the crime). 
 

Having read many of your other posts Chutta, I believe we are in the same place ethically on most issues and I believe either my communication is not clear or you have taken it other than intended. I do not condone lying. Period. However, there is a large gap between lying and being vague/euphemizing/etc that is an ethical gray area. There are many agents out there that choose a grayer path than I would. I don't condone it and it may or may not be legal depending on where they draw the line. That it their conscience and liability; if I witness it I call it out. As in any profession people may choose to lie. Those people may or may not be caught and held accountable. I consider these forums a place to educate people that are not professionally trained...part of that is to be realistic and aware that behaviors that skirt those gray areas are in every profession.

People should check with the laws of their state to see if an agent's behavior is illegal as not every state has the same code as the NAR. As someone that is usually a buyer's agent, I have seen a good chunk of the crud out there and the moves a lot of seller's agents attempt to pull. It makes sense for people seeking out an education to be aware of where the gray areas are and how to tell how deep someone is in their exploitation of that gray area.

Fair enough.