Multiple offers often leave buyers edgy

By M. Anthony Carr

When it comes to buying a house, most consumers are continually stumped by the "rules" governing multiple offers in a real estate transaction. What I have found in many instances is that what is legal and acceptable practice isn't what many buyers want to hear."You should have told me you had multiple offers... that's not fair," is usually the first complaint filed from the party who loses out on a contract. Then they go looking for someone to file a complaint against or to sue (we are, unfortunately, the most litigious country on the globe).I've heard some buyers complain that they believe the listing agent is lying and only trying to push up their offer when they are told there are multiple offers then they demand to see the other offer. They assume that the seller is simply trying to push up the price by claiming there are other offers when none actually exist.Revealing the status of multiple offers is up to the seller. The cold hard facts are that the buyer has to sit and wait for a response from the seller (depending on whether or not he/she wrote in a deadline for responding). Nevertheless, the buyer has no "rights" to know if there are more offers.The National Association of Realtors, based in Washington D.C., publishes a Code of Ethics that has several Standards of Practice (SOP) in dealing with multiple offers. First of all, a realtor "shall submit offers and counter-offers objectively and as quickly as possible."In fact, all offers must be submitted until the seller has made a final decision. "When acting as listing brokers, realtors shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Realtors shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord..."As far as telling buyers about multiple offers, this situation has apparently became so prevalent that about a year ago, the National Association of Realtors instituted the following instructions in its Standards of Practice: "Realtors, in response to inquiries from buyers or cooperating brokers shall, with the sellers' approval, divulge the existence of offers on the property."The key wording in this phrase is "in response to inquiries." It's a kind of "don't ask, don't tell" situation for the listing agent. She's not going to tell the buyer about multiple offers if the buyer doesn't ask however, reading the Standards of Practice further, you can see that the realtor is not obligated to divulge the presence of multiple offers without the sellers' approval.In a seller's market, some agents will place a deadline on when all offers must be submitted. Once the offers are submitted, the agent then settles down with the seller for a marathon contract review. The real area of contention comes when offers float in one after the other over a few days. Thus, the usual practice of dealing with multiple offers would go something like this:1. Each offer is presented to the seller for consideration.2. The seller will hear all offers before making a decision.3. A seller can accept or begin countering more than one offer at a time, however, she/he must set an order of precedence; i.e., primary offer, first backup contract, second backup contract, etc.4. Be sure to get released from an offer before finalizing the selected offer; i.e., don't sell the house twice.Multiple offers can be a good thing. In a fast-paced market, they are considered the norm and the presence of such inflates home pricing. The buyer who works with an agent that understands the aggressive techniques needed to escalate their offer will win. However, you can also have buyers pull contracts during multiple offer situations because they want to deal in a less competitive environment.It's interesting to hear from buyers who are outbid in the selling process and start talking about "fairness" in a bidding war. There's this idea that, just like kids lining up for a drink at the lemonade stand, if they get there first, they get to drink the freshly made beverage at the price posted without any interference from the kid in the back of the line.In real estate, the seller doesn't care when you got there he or she is looking at basically one thing what's the net dollar amount to the seller.Copyright Content That WorksM. Anthony Carr, columnist for www.RealtyTimes.com, has written about real estate for 15 years.