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Sellers can "shop" your offer if you let them

by sfishome on November 8, 2006

Earlier this year the Realtor Association made it an ethical duty for it’s members to “advise potential clients of the possibility that sellers or sellers representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.”

They point out that California law doesn’t require Sellers to keep terms confidential. They advise concerned Buyers to submit a “confidentiality agreement” which the Seller can choose to accept, reject or ignore.

Why the “new” concern? Interestingly it’s been a misperception of most practicing Realtors that offers could not be disclosed to other Buyers in an effort to drive the sales price up. I even watched a “Million Dollar Listing” TV episode in which one of the Realtors stated this, and the screen had a little caption stating that it was illegal to tell other buyers about offers. In fact, it’s neither illegal, or unethical. I personally think it often can be the “right” thing to do for both Buyers and Sellers.

A recent example is a Condo that got 4 offers on it, and the 2nd best priced offer was the “best” in my Seller’s eyes, except for the price. This particular Buyer had shown enormous interest in the Condo, so we told him how much the higher offer was, and he chose to beat it to get the Condo. You might think this unfair to the original highest offer, but there were a multitude of problems with their offer and we just didn’t trust their intentions to follow through on their offer.

So the Seller got an even higher sales price, and the most interested buyer got the property. Whether you think it’s a good idea or not to share the details of other offers with other buyers, the bottom line is that it is NOT illegal.

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