Profile picture for KennyMatte

does the agent have to tell you the highest offer is when they tell you there are "multiple offers"?

  • January 17 2012 - Citrus Heights
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (51)

Profile picture for Caveat Emptor
seems rather redundant, but...
  • January 26 2012
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-  it is one of the many mind games that realtors play and don't understand that they are playing because they don't care to understand

Rrright. Well, thank G-d we have you to enlighten us.


  • January 25 2012
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Profile picture for Caveat Emptor
42.7% of statistics are made up on the spot.
  • January 25 2012
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I'm just saying that 99% of REAs don't really know anything about positional bargaining

No doubt you have a Harvard study to back up your off the cuff conclusion.

Good job!
  • January 25 2012
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Profile picture for Caveat Emptor
And, by the way NTETS you are so wrong!! Every time you get in a multiple offer situation there is always the risk that you may lose interest from all potential Buyers.

err no, every time you reject an offer and either counter or request a higher offer there is a chance that you will lose interest from a single buyer. a multiple offer situation isnt a monster that arises out of a random convergence of signs and omens, it is a situation where the seller is leveraging a strong negotiating position for a bigger payday. every offer is literally on the table(by law) until it is rejected or it expires.

but you are right, negotiating a position is about ego as much as it is the financials. some people won't even consider paying list price because they are so wrapped up in getting deals and being the big negotiator. people are funny that way.

I'm not saying that REAs are never acting in their client's best interest sometimes when they manufacture a bidding contest or push a client to the edge of their comfort zone, its a good thing. I'm just saying that 99% of REAs don't really know anything about positional bargaining and that they are simply using intuition or a kindof standard negotiating formula that they dont really understand, and that often times this leads to a conflict of interest when they negotiate for the sale/commission instead of the client's interest.
  • January 25 2012
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Profile picture for Rita Walker
One of my properties had been sitting awhile. I got a lowball offer on Friday evening. Saturday Morning  I had an agent call to tell me she was emailing an offer, at which time I told her I had one received one the night before.
Before I even had the offer in hand I called the first Realtor. Told him I had nothing in hand yet, just a promise of it coming, so he might want to talk to his client. When it did come in it was 10000.00 higher, with closing costs/pp paid, so still 6000.00 better. Made contact with first agent, he backed out and said he would come back next week when this one fell through.

His Buyers were not happy and came to me with accusations. When all was said and done, it turned out that their agent had not given them the opportunity to make up their own mind, he chose to do that for them by telling them I was just trying to get a higher offer from them.

Did not fall through. Great offer!! Great agent to work with, while the other client lost because of their agent's ego.

And, by the way NTETS you are so wrong!! Every time you get in a multiple offer situation there is always the risk that you may lose interest from all potential Buyers.
Most of us work for the best interest of our clients, which will be in our best interest in the long run. If you do a good job it will keep you in business for many years. If a Realtor puts their interest in front of the client, they will fall by the wayside, leaving attitudes like yours for the rest of us to deal with.
  • January 25 2012
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Profile picture for Caveat Emptor
It speeds things up and gets people to bid more. people aren't bidding and re-bidding 2000 dollars at a time, they are bidding against what they are imagining someone else would pay and in other words bidding against themselves. It plays on emotional attachments to a single property, creates an aura of fear and urgency. Buyer's agents play it up even more by trying to arrange a new offer in a single phone-call, maximum 30 minutes. it pushes through higher bids and stops buyers from walking away.

it is one of the many mind games that realtors play and don't understand that they are playing because they don't care to understand.
  • January 24 2012
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Sure, but . . . if you had a buyer in a multiple offer situation, wouldn't ye want to know what was the best offer the seller had in hand so far?
  • January 24 2012
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Profile picture for Rita Walker

Mack,

I borrowed this from the NAR code of ethics:

In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them."

Accepting this standard as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below. (Amended 1/07)


Duties to Clients and Customers

Article 1
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)

  • January 24 2012
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The "escalation" clause can also take the form of an addendum. Basically, it states that the buyer will pay $x over any other offer, provided that . . . and that's where the clause gets tricky. Provided that the other offer is not contingent on the sale of their house, provided that the seller attach the benchmark offer in its entirety to the offer . . . 

@Rita, I'm not quite sure that it is "unethical" to give the details of someone else's offer. I have heard this often, but professional ethics are something that are subscribed to within the profession, and I haven't seen any evidence that real estate agents subscribe to an ethic of not disclosing the details of someone else's offer.

  • January 24 2012
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Profile picture for Rita Walker
Grokster,
Usually the Buyers have seen the property prior to placing the offer. Could have been days before. When they decide to place the offer could be at the same time or several hours after the another offer has been submitted, but is still in the negotiation process.

And for everyone else .... it is unethical to give the details of someone else's offer. If you were the better offer and your details were exposed, I know you would be here complaining about that.

It is also not always about the amount.
 If you were the seller and had 2 offers, the first was 2000.00 less than the second, cash, with no inspections. The second was a higher offer but had to finance and wanted inspections. Which would you take?
  • January 24 2012
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I never heard of an escalation clause. I have to find out if it exists in Ky.
  • January 24 2012
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Profile picture for grokster
I'm confused as to how these alleged "multiple offers" might occur.. as I can't even get a Listing Agent to show me a property that "has an offer"





  • January 24 2012
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Profile picture for hpvanc
The buyer has every right to call the sellers bluff.  It is up to KennyMatte and any other party on the offer contract with him whether he wants to call the bluff or keep playing.  Maybe he already has the best offer, maybe he doesn't or maybe another buyer will up the ante or maybe they won't. 

The only advise I have for Kenny is don't let anyone else tell you how to play your cards. 
  • January 18 2012
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All RE transactions should be a blind auction, huh? That sounds Constitutional, and Capitalist. Didn't Karl mention something like that in the manifesto? Should should Planning and Zoning have to approve all sales? HUD? Dept of Homeland Ambiguity?
  • January 18 2012
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And, Roberto, that is the form that the escalation addendum used by agents in my MLS takes. Probably in most MLSes, I don't know.



  • January 18 2012
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Profile picture for the_country_hick
Roberto, "Do you guys whine and complain about bluffing in poker too? is that unethical?"

If playing poker I could look at every one elses cards and no one else could look at mine would you think that was ethical? That is the closest analogy yet to what is happening with a seller seeing all of the cards and a buyer seeing none of them.

P.S. I do not play poker.
  • January 18 2012
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If it pisses you off so much, Dan, you could write an escalation clause on an offer. 

" I am willing to beat any proven offer by $100, up to $______" They could still fake it, but most agents wouldn't be willing to risk losing their license to lie about it. 

The listing agent's responsibility is to get as much money as possible for the seller. Period. 

Do you guys whine and complain about bluffing in poker too? is that unethical?

  • January 18 2012
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That's a good point, Dan, but it misses the mark. Sellers have no obligation to buyers to keep the contents of their offers secret. They may have a legal obligation to keep the buyer's identity confidential, but not the content of the offer.

In fact, there is one circumstance where it is virtually mandatory to disclose the contents of one offer to another buyer, and that is when using it as a benchmark for a "meet or beat clause," where the buyer conditions acceptance of their offer and receiving a copy of the benchmark offer.
  • January 18 2012
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Dan, you may continue to debate this issue with yourself...and  I am glad you are enjoying  the view from your fence....just don't fall off


Kenny, by now your question as been answered.....so let me wish you good luck!
  • January 18 2012
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Profile picture for the_country_hick
Debbie, I am not on either side of the fence. I am sitting on top of it enjoying the view on both sides.

How is that that a seller can decide to keep their information private and not disclose it to others but a buyer making an offer loses that same choice?

To act ethically means all parties have the same options available. To limit one but not the other is unethical. Why can a seller give out information (open bid) but a buyer can not keep their bid confidential (closed bid)?

Either both should be able to say this information will be kept confidential or neither should.
  • January 18 2012
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Profile picture for sunnyview
No, they don't have to tell you the highest offer. You have to offer what you feel comfortable paying not get pressed into paying more than you can afford or the house is worth. Ask your agent for a CMA, look at the house for any work to be done and then make the best offer you are comfortable the first time. 
  • January 18 2012
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Dan, just out of curiousity - which side of the fence are you on?
First I thought you wanted bids to be transparent, because, you know....all those unethical agents out there might be lying about other bids and such, and "how do you know for sure " etc, etc.........................now it sounds like you're on the side of keeping them private, as with bidding on public contracts.......



@ Steadystate.........Bottom line:
 Make your offer on what you can afford based on appraised value.
Lesson: Multiple offers are like unicorns. Everyone talks about them but no one has seen one. So forget the fairy tales and do what is best for you.

I totally agree with you on a buyer making an offer they can afford,  and are comfortable with, regardless of whether there are other offers or not........
But..........
Who paid for this supposed "appraisal" you keep referencing?

And..........I do see, and have seen,  multiple offers (but not dead people)......so fairlytales do come true!
  • January 18 2012
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Sure, SteadyState, a lot of times, multiple offers are below list price. That's a given. At auctions, often times the bidding closes out below the reserve price. C'est la vie.

Dan, now you're swinging from both sides of the plate. Society is not at risk of the home seller disbursing taxpayer dollars to friends and family. Why are you arguing that you, as a home seller, cannot tell other prospective buyers that you've already got one offer at such and such a price if you want to? Is that really the argument you're trying to make? 
  • January 18 2012
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Profile picture for SteadyState
Do not assume multiple offers means offers above listing price.

Let's see how the multiple offer process unfolds:

1. The agent(s) inform you that one or more other buyers have placed an offer for the property you are interested
2. The agent cannot provide details because the offers are confidential

Let's take some examples. House listed for $500K.
1. No offers exist and agent(s) wants to create interest in you making a offer so he/she discloses that other offers for the property has been received. Your best course of action is to make your offer at less than $500K without weighting the "potential other offers". Your worst action is to offer above $500K.
2. Two other offers have been received at $400K and $300K and the agent informs you that there have been multiple offers on the property. Your best course of action is to make your offer less than $500K independent of the other offers. Your worst action is to offer above $500K. (I do not believe the agent will say "we have multiple offers above $500K" - more likely they will say "we got multiple offers and if you want the property you may want to put forth your best offer").
3. Two other offers have been received at $500K and at $550K. Once again your best action is to offer what you can afford based on the appraised value of the home. If someone else wants to overpay is a flat market, let them.
4. No other offers have been received and your agent informs you of the same. Once again your best bet is to offer what you can afford based on the apprised  value.Your worst action is to offer above $500K.

Bottom line: Make your offer on what you can afford based on appraised value.
Lesson: Multiple offers are like unicorns. Everyone talks about them but no one has seen one. So forget the fairy tales and do what is best for you.
  • January 18 2012
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Confidentiality by the Seller's agent, to the Seller, would preclude disclosing the amount of the offers, unless expressly allowed by the Seller. Negotiating effectively is not unethical, even if you're negotiating with a RE Buyer, who is less adept.
  • January 18 2012
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Profile picture for the_country_hick
Mack, it absolutely is a question of ethics. It is simply not ethics that NAR cares about. There are business guidelines that are legally demanded in a profession. That is what NAR thinks of as ethics. It really has nothing to do with real ethics. If it did there would be a lot more things about treating the buyers well that do not exist.

Then you have real ethics where what the law and rules say does not matter. This kind of ethics is being fair and doing what is right for all parties involved. To say one party (seller) can have all of the information and spread it around to other parties any time they wish but that the other party (buyer) is not allowed the same opportunities is unethical on its face. True ethics are based on fairness. What is being talked about here is completely unfair and codified into the NAR code of ethics which is a farce at best.

Apparently real ethics are not used as they should be in real estate. Just this thread (and the links from Tug) prove that.

When a town is contracting for something like rebuilding a road or plowing the roads or putting in a playground they put the job out for bid. No one knows what the other bids will be until the bidding is closed. People bid what they feel is fair. No one is told how many other bids exist or what the amount is. To give that information would be considered unethical and using inside information. When the time comes to decide who gave the lowest bid and best contract (which could be higher) the town does not go in for another round (or 5) of asking for even lower bids.


Why is real estate different?
  • January 18 2012
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Dan, you'll swing at just about anything you see thrown around in the infield, won't you?

You can load up your offer with as many contingencies as you want; they have no force unless they're agreed upon by the other party.

You might want to have a contingency where you want the contents of your offer broadcast the world-round, because you want to scare off any other pretenders to your intended castle.

However, this is not a question of ethics or law - I think that listing agents absolutely can disclose the contents of offers, but there usually is no especially good reason for doing so. As Keeley and others point out, the listing agent wants to see the buyers make their best offer.
  • January 18 2012
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The listing agent represents the seller of the property (regardless if the seller is an individual or a bank) and should not disclose any information about competing offers to the buyer's agents in a muliple offer situation. The buyers are expected to make their best offer and the seller hopes that the buyer will not want to loose the property to a competing bidder and will make a high offer.
  • January 18 2012
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Profile picture for the_country_hick
Mack, "I don't agree that the agent "can't" tell you what the highest offer is - after all, the listing agent does not have a duty to the bidder."

That means a contingency in the offer would be to include that any offer made is confidential and can not be released to other bidders.

Or do buyers just not count at all in the realtors world?
  • January 18 2012
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