How Do You Handle Bidding Wars Legally?
CHICAGO – Ultra-competitive housing markets have fueled bidding wars between buyers frantically competing for a limited number of home listings. In these cases, real estate professionals find themselves helping clients navigate multiple offer situations.
But these agents must be careful to avoid misunderstandings and reduce the risk of discrimination in the process.
“Real estate professionals can help avoid complaints and fair housing issues while helping both the buyer and seller understand their options,” says Deanne Rymarowicz, associate counsel at the National Association of Realtors® (NAR), in a new “Window to the Law” video.
Rymarowicz highlights three principles real estate professionals should follow when navigating multiple offer situations:
- Be mindful of your legal and ethical duties. Most states have laws and regulations regarding timeframes for presenting offers and what needs to be disclosed to the other party in a multiple-offer situation. Some states, for example, prohibit revealing the terms of a buyer’s offer without the buyer’s consent.
The Realtor Code of Ethics also speaks to handling multiple offer situations, such as requiring that Realtors “protect and promote the interest of their client.”
- Watch for potential fair housing red flags. “Buyer love letters” – letters, videos and photos given to the seller from the buyer expressing their desire for a home – could possibly lead to fair housing violations.
“These ‘love letters’ often innocently include personal information that reveals a prohibited basis for discrimination, such as ‘we can see our family celebrating Christmas around the fireplace’ or the ‘wide hallways will accommodate my wheelchair,” Rymarowicz says in the video. Fair housing centers on eliminating discriminating and “love letters” could potentially cause an implicit bias.
“Accepting an offer based on anything other than the price, terms, and merits of the offer might violate fair housing law,” Rymarowicz says.
- Let the client make the decision. Educate your client about multiple offers and strategies for responses. “You may even offer suggestion and advice based on your knowledge and experience,” Rymarowicz says. But ultimately, “it’s up to the client to decide what offers and counteroffers to negotiate, reject and ultimately accept.”
View more tips for handling multiple offers, without putting yourself at legal risk, by watching “Window to the Law: How to Handle Multiple Offers,” produced by NAR’s legal team.
Source: Realtor® Magazine Daily News
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