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When the real estate market is hot, there’s a good chance that a home seller may get multiple offers for the property you desire. This often causes some amount of anxiety and even disappointment if you lose out in a bidding war. But, can a realtor tell you what other offers are? Well, the answer to this is not as straightforward as it seems. Let’s find out under what circumstances can a real estate agent share or not share the other offers. And, what are the legal as well as ethical issues involved in sharing someone else’s bid? And finally, does it impact the home sale?
Interestingly, while real estate agents cannot legally share your offer amount or any other details of your proposal with other buyers, the home seller can. That is to say, there’s no law preventing the seller from sharing the information. What’s more, the seller can even share your offer with other potential homebuyers. So, the real estate negotiations may not be entirely disguised.
However, the real estate agent cannot share your offer with other buyers – just with the seller.
Can a realtor tell you what other offers are to other buyers?
The short answer is no, they cannot. However, listing agents have a legal and ethical obligation to negotiate the best terms for their clients and to share multiple offer details with them. Sometimes, in the best interest of the seller, they may with the seller’s consent disclose your offer to another buyer or another buyer’s offer to you.
However, they cannot do so under three exceptions or circumstances:
- If the buyer and seller enter into a confidentiality agreement whereby all parties agree that the existence of and the offer details will not be disclosed. The only problem is that a seller who expects their home to receive multiple offers may not agree to sign such an agreement.
- If the real estate laws or real estate regulations of the state do not allow it.
- In case the seller does not want to disclose the offers and says so to the realtor. The latter has no choice but to follow their client’s instructions.
What happens when there are multiple offers on a house?
When a seller’s agent proclaims that there is another offer on the house, the potential buyer usually gets suspicious that the realtor is trying to panic them into buying the home quickly or using the competing bid ruse to force them to place the highest bid.
This suspicion becomes stronger when upon asking for the details of the other offers, the agent says that he or she cannot disclose them.
A buyer generally prefers if the seller’s agent shares the details of other bids so that the buyer doesn’t have to pay more than they should. However, more often than not, the same buyer will not want the seller’s agent to share the details of their own offer lest the information gives the other house hunters the opportunity to formulate a winning bid. So, it’s a bit of a shrewd play.
Keep in mind that while there might not be any legal time frame during which the seller must respond to your offer, a quick response is always appreciated. The seller and/or the listing agent should respond within a few days – ideally within 48 hours.
Are there real estate laws about disclosing offers?
There are different types of law that govern real estate and property transactions or ownership – at the federal, state, and local levels. These are:
- Regulatory laws are enacted by a government administrative agency.
- Statutory laws are enacted by a legislative body.
- Common laws evolved from decisions by the courts.
In some states, the legislation prohibits an offer from being disclosed to other buyers, while in others there’s nothing illegal about telling one buyer what house price another has offered.
Is it ethical to disclose offers?
The code of ethics surrounding real estate transactions has different layers to it. The most basic ethics that real estate agents should abide by are of course decency, honesty, and fairness.
The other is a legal obligation that spells out the fiduciary duty of all parties – the buyer or the buyer’s agent and the listing agent.
The National Association of Realtors (NAR) in its Code of Ethics points out that the buyer’s offering disclosure is up to the home seller, and the listing agent must follow the seller’s decision within legal and ethical boundaries.
It states that real estate agents must be honest with all parties. Therefore, an ethical listing agent will not lie about multiple offers on a home just to stoke competition. Keep in mind that any false information will not only be unethical, but it can potentially get a seller into legal trouble.
If a buyer is absolutely against disclosure of the terms and conditions of the offer, they can enter a confidentiality agreement before presenting their offer. It will prevent the seller from sharing the specific terms of the proposal with other interested buyers.
How does an agent handle multiple fiduciary duties?
The agent is legally bound under an obligation to act in the best interests of the client, the seller. The problem comes when more than one of their clients shows interest in the same property.
So, how does a buyer’s agent prioritize the interests of all their clients? That’s why it’s important to ask your real estate broker about their game plan in handling the situation if they have more than one client interested to buy the same house.
In larger brokerages, it is easier to represent each buyer interested in a property by a different agent. But, if you’re sharing an agent with other interested buyers, you’ll have no option but to put your faith in your agents’ integrity. Keep in mind that it’s unethical for an agent to use their position to “shop” for offers among all the potential homebuyers – especially if they are trying to drive up the home price or counter offers for personal gain.
Always ask the listing agent directly if the other offers on the table are from someone whom they represent.
Remember that if your real estate agent is a member of NAR, they will be bound by a code of ethics whereby they pledge themselves to protect and promote the interests of their client. And that they must treat all parties honestly.
As a homebuyer, being in a bidding war for your dream home is stressful enough. But, wondering if there really is a bidding war and if you should hike your price is more stressful.
When you decide to sell or buy a home, you need to make sure that you hire the right real estate agent. And, you need to trust your agent.
It’s a good idea to have a game plan from the start of the home-buying process to avoid anxiety or disappointments. Make sure your realtor shares all the information they can – legally and ethically.