Dangerous Business Practices in a Sellers Market, Part 1
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- เผยแพร่เมื่อ 21 ม.ค. 2021
- Washington REALTORS® Legal Hotline Lawyer Annie Fitzsimmons kicks off a new series this week with RE/MAX Integrity Owner Broker Paul Blumenstetter! In this video series, they start by focusing on dangerous practices that Annie has been seeing from listing brokers through the Hotline (part 1) and then in the following weeks, dangerous practices from buyers brokers. Following that, they'll cover specific scenarios and the risks that arise from this very competitive sellers market.
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Legal Hotline Video featuring Annie Fitzsimmons, Washington REALTORS® Legal Hotline Lawyer - The Legal Hotline is a Washington REALTOR® Member only benefit. These videos are intended for Washington REALTOR® members. If you have questions and are a primary member in good standing with Washington REALTORS®, visit www.warealtor.org to contact the Legal Hotline Lawyer. You will need your NRDS ID and password to inquire with the Legal Hotline or search the database.
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Thank you
I was surprised that they didn’t mention the phrase I see in all the agent remarks that list an offer review date: “Seller may review and accept an offer before the review date,”
I think that's something the NWMLS adds.
@@karykrismer1448 yes, that is from a standard selection in the Offers field. I hadn't thought about where I read that until you pointed this out. It seems that is a good feature.
I agree with PoltPlace. It is not helpful to be repeatedly told "this is a bad system." This is the system we currently have, and what is helpful is to be given guidance on how to best navigate it in a challenging market. Our duty to our Seller includes giving them the best exposure possible to the marketplace. The COVID-19 pandemic has changed our ability to host open houses or have more than a few people in a home at one time. Providing an offer review date that allows appointment scheduling for safety purposes while simultaneously allowing a reasonable number of Buyers to see a home has been a real asset. Given the fact that many Buyers in our area are coming from out of town or have work schedules to navigate, it is more than reasonable to provide a timeframe between listing a home and having Sellers decide which offer they choose to accept. The current system allows a statement of clear expectations up front. Sellers always retain the right to change their minds and not wait until their scheduled review date. However, in my experience, the old adage that the first offer received is usually the best offer is no longer true. Inspections were covered in this video series. How about some guidance on navigating escalation clauses, additional down payments, and more?
I have represented clients on both sides of the seller review date issue - representing a buyer, we were waiting until the morning of the review date to offer a CASH offer of $25,000 more than the seller took before the review date. My buyer was devastated that the seller took an offer without waiting for the review date. (I had also notified the Broker that we intended to bring them a very good CASH offer, but she insisted later that it was the seller's choice to accept one early.). I have also represented sellers that waited, and we were delighted at the range of offers we received. I try to always have a great in-depth conversation with the seller about all sides of this issue. I believe that the offer review date allows great market exposure in this crazy fast Seller's market. Good for the seller, maybe not so great for buyers, unfortunately...
Our Agency Law requires that we present all offers in a timely manner. It is distressing to learn that some brokers may be arbitrarily holding on to Purchase and Sale Agreement offers and not presenting them as soon as possible to their clients. Even with an offer review date in the future, each offer can be sent on to the seller for review. With an offer review date, it allows more time for folks to take a look at the property, and perhaps make an offer. It also helps to take pressure off of a seller that wants time to think and not be rushed into a decision.
If there is no offer review date, it is mot uncommon for a buyer broker to submit a full price offer with a very short expiration date/time (sometimes even less than 24 hours) trying to pressure the seller into taking their offer before someone else has the chance to see the property and possibly offer a higher price. There is the risk that a buyer broker may hold off on sending in their offer until the offer review date, but that would need to be something the buyer broker discusses with their client. They have a duty to present offers in a timely manner as well.
If a seller decides to accept an offer on a date that is prior to the offer review date, It is important to update the listing information on the NWMLS as well as contact all brokers that have shown the property and those with future appointments, so that they will know what is happening. This would be common courtesy, in my opinion.
In regards to the references to listing attachments such as "Tips to Write a Winning Offer", I think that this was somewhat vilified here and not clearly explained in this video. Annie, you have recommended that we attach such tips to the listing and I have begun to do so. These tips are not telling the buyer what terms to offer, simply tips that say such things as: Please fill in the buyer address and contact info; If you are sending attachments, send them in a pdf separate from the Purchase and Sale Agreement; If you use a financing addendum, be aware we will take your client up on the offer to send them a Loan Info Notice; please send pre approval in a separate pdf-- those kind of tips. Yes, a seller should be aware of this list and give approval and it should be attached to the listing paperwork that is signed by seller.
Keep up the good work. I was a little offended by some of the broker's comments about what listing brokers are all doing, because that lumps us all together and is not fair. I pride myself on knowing the NWMLS rules, as well as the real estate laws and the Realtor Code of Ethics and standards of practice!! It must be those folks that don't take your classes and watch your weekly videos, because those of us who know the Agency Law, are presenting offers in a timely manner!
Ah, that’s a good tip on tips. :) That type of information makes sense.
I absolutely agree we have to present offers in a timely fashion! Especially before they expire!!
It's not complicated. I'm a HUGE fan of offer review dates in this market but when you receive an offer as a Listing Broker, you present it ASAP. Really not that difficult to comprehend.
I feel it can also save you a chunk of time during the "review" because the seller has seen all the offers throughout the period.
Great point.
Can buyer agent call the seller to see if the offer was presented
I heard Paul repeatedly say he doesn't like review dates and I appreciated exploring what their limitations are. But what exactly is the alternative? First come first serve also seems incredibly unfair in this market with such low supply and real limitations on showings, a review date lets more viable buyers see the property and will likely get our Sellers the best offer for their situation, thus representing the Sellers interest to the fullest.
Almost every listing I see that has a review date also says "seller may review sooner." I feel like they're making a big issue out of something that most LA have corrected for already.
@@myboyboris I am almost always asked: "when are you presenting?" So you have to assume that there are many agents holding on to offers.
This was great information!!
Ok agree there is a law in WA however how do you find out ? It looks like there is no way for the seller or buyer to figure out if there were more offers if realtor isn’t telling them ?
I heard all cons and no pros for a review date in this video. One of the significant pros for honoring an Offer Review Date is that it allows the property to receive proper market exposure and therefore more likely to sell at market value. In an escalating market where there are more buyers than sellers, I believe the Seller is taking a greater risk of leaving money on the table by not having and honoring a review date that allows all the interested Buyers a chance to view the property, perform a pre-inspection if desired and submit an offer.
Yep, it may be smarter usually to wait till the review date, but as near as I can tell, it is the sellers choice if he wants to wait that long.
Of course as a buyer, my offer will contain a drop dead date BEFORE the review date.
No sense as a buyer to give the seller any more time to play the market if I don't have to.
Asking for X business days to review offers accomplishes the same thing, without the negatives of an offer review date. If the listing goes live on a Thursday or Friday that gets you the same exposure without the negatives. And BTW, another negative not mentioned in the video is it's difficult to do your due diligence on offers if they all come in a few hours before you're going to discuss offers with the seller.
In regards to offers not being presented to sellers because listing brokers are holding offers. I am surprised neither one addressed the MLS rule that allows the buyer's broker to contact the seller directly if the buyer's broker has a written offer to be presented. Rule 125.
RULE 125. Contact with Owner to Advise of an Offer. Members with an existing, signed offer, counteroffer or proposed amendment to an existing contract may contact an owner directly for the limited purpose of advising the owner that the offer, counteroffer or amendment is presently available for presentation, only if that member has first notified the listing broker, branch manager or designated broker. Such notice may be given by any reasonable means, including leaving a telephone message or by a telefax transmission and must identify all contingencies in the offer, counteroffer or amendment other than financing or closing an existing sale of buyer's home.
Ok here's a weird question on presenting offers (not about offer review deadlines). Last summer, I actually received an offer on a WA listing from an OR broker on OR paperwork. And, no, the agent was not also licensed in WA! Am I required to present that offer?? I did present it, and alerted my client to the issues described above, and it was rejected solely on the merits (low price, etc) anyway. But, I'm still curious if that written offer needs to be presented, even if it was submitted to me on OR forms from an OR broker???
I hope that the agent who publicly bragged about violating mls rules and committing real estate fraud was turned in to both the mls and the state DOL and is duly punished.
Only if another broker reported her, and if you ask me that fact is one of the largest issues that needs corrected. Someone should be reviewing listings for actual fraud, ie. bedroom vs septic size, square footage inaccuracies and blatant steering hand over fist, including steering of brokers and their offers....
One aspect of the review date that is not addressed is the explanation to the Seller that we as Buyer Brokers as well as the Buyers are spending significant time in driving around and previewing these properties, and we are basing our offer strategy sometimes on that review date. When Sellers are picking offers early it really is putting a negative opinion on the listing broker and seller. Yes it is up the seller to accept early under this rule, but the seller is already initialing the listing input with the review date. I think the rule needs different language.....maybe "offers to be submitted upon receipt and seller will choose an offer on X date." This will bind the Seller to that date giving everyone who wants too an opportunity to submit an offer.
Good stuff. The more I find out about the real estate market, the less I want to actually buy a house.
I probably still will, but it will NOT be a pleasant experience for me, just based on the videos you have presented.
When I did my first purchase I didn’t know anything and got lucky enough to have a good agent. They had retired by the time I did a bigger transaction by selling my place and moving up to a much more expensive home. I still didn’t know much at all about the process of selling and buying but again I got a great agent through the USAA referral process that explained everything along the way like Annie and this broker here. Funny enough, by marriage I became an accidental real estate investor and landlord, and I’ve done a lot of selling and buying. I’ve seen much worse agents that my wife used than the one I happened to have when I bought my house. We do enough transactions that I decided to get my license to handle one side of each transaction myself. When I went to find a designated broker it turned out the agent I had most recently used was now a designated broker like the guy in this video. He’s great and I’ve seen that he has a great team of agents. I’m really just in this for my own deals but consider looking up Paul Frink at Berkshire Hathaway Home Services if you want to buy and don’t already have an agent.
I am not sure if it has happened to us in WA state because our Realtor disclosed to us that she will be representing buyer and seller then open houses comes and house received offer within a day then realtor told us that there are no other offers and kept pushing us to sell the house to the first offer . How do I find out if there were more offers and realtor played us ?
Unfortunately the WA contract doesn’t have a signature line or box to check for rejection of offer like the Oregon contract does. In Oregon sellers must accept/reject all offers with a signature. But also take this with a grain of salt... it is hard for Oregon DOL to prove that the offer was not presented because agents don’t always turn in rejected/losing offers to their brokerage. WA is trying to get more strict with turning in rejected/losing offers through file audits but it is a lot of dots to connect.
Create a "boiler plate" requirement to present all offers within a given number of hours from when they're written. Use of the word "timely", without a definition is far to vague and invites misuse and individual interpretation of this loop hole.
“Mending fences” is horrid. But I must represent my seller and be a duck with regard to all the hateful responses from the buyer brokers (which I am also much of the time)
It's too bad the video doesn't mention the obvious alternative to an offer review date: Asking for X business days to review offers. If you list on a Thursday or Friday that gets you the same market exposure without these negatives (e.g. no buyer expectations they have until a certain date to make an offer), and more importantly it allows the listing agent time to do their due diligence on offers prior to discussing them with the seller. We've only done an offer review date once, and found it problematic. It's too bad the NWMLS supported this practice by making it a listing field.
You can thank the past REO time period for the review date. Didnt exist before that.