Presenting Offers: OK with License Law? Code of Ethics?
Your exhausted seller received five offers in one day. Four are over asking price, but the last one offers $50,000 less, possibly making it a waste of time for an already exhausted seller. Must you still present it? Perhaps not – but only under very specific conditions.
ORLANDO, Fla. – In today’s fast paced market, sellers receive many competitive offers on their properties. Some sellers may choose to ask for highest and best; some sellers may just accept one of the offers presented to them.
This article isn’t about that though. This article focuses on the agents involved and their actions with regards to offers and counteroffers.
Florida real estate licensees can have one of three types of agency relationships with buyers and sellers: single agent, transaction broker or no brokerage relationship. Unless a licensee has something in writing with their respective party indicating single or no brokerage relationship, Florida law presumes you are in a transaction broker relationship.
Under a transaction broker relationship – as well as single agent relationship – you have obligations with regards to offers and counteroffers. Additionally, Article 1, Standard of Practice 1-6, 1-7 and 1-8 of the Code of Ethics set forth further requirements regarding the presentation of offers and counteroffers.
Specifically, per Florida Statute 475.278, the licensee is obligated to present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing. This article focuses on the language of this statute.
What does this mean in plain English? Unless your buyer or seller sent you something in writing in advance, or you’ve added something into your listing or buyer brokerage agreement clarifying what kinds of offers and counteroffers they want to see, you must present them all.
We all know the market is hot right now, so I understand the pressure to act quickly, on both sides. However, Florida Realtors Legal Hotline calls have included statements from Realtors indicating that some sellers feel overwhelmed by the number of offers they’re receiving. As a result, these agents try to help by picking and choosing which offers the sellers see.
Let me be clear: If you don’t have something in writing in advance – before you received those multiple offers – stating that you’re able to do this, it’s a violation of your real estate licensing law.
Does this mean this can’t happen at all? No! But you must do it properly.
If you’re a listing agent taking a listing, you can easily have a conversation with the sellers and should be asking a variety of questions, including what kind of offers the sellers are looking for. Do they only want to see cash offers? Do they only want to see offers over a certain price point? Do they only want to see offers that can close by a certain time? If so, clarify that in writing in your listing agreement or get it in writing some other way from your sellers. Then if you get offers that don’t fall within the sellers’ criteria, you do not have to present those offers and are able to move forward, confident you are in compliance with your real estate licensing law and the Code of Ethics.
Meredith Caruso is Associate General Counsel for Florida Realtors
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