What Would You Say?

The laws and etiquette surrounding writing offers and everything thereafter


 Cori Lamont  |    August 06, 2014
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From time to time, I hear stories where buyers’ agents are frustrated because they don’t know if their offer was presented to the seller since they never saw documentation suggesting that the seller has taken any action as to the buyer’s offer.

The Wisconsin administrative rules provide guidance surrounding the appropriate behavior of agents representing sellers and communication as to the seller’s actions relating to presentation and going over the terms of an offer with a seller.

The following discussion provides a variety of points pertaining to agents refusing to write an offer for a buyer, listing agents withholding offers from the seller, prompt presentation of an offer and other written proposals, and letting the buyer know the seller’s actions to the offer submitted by the buyer.

Refusing to write an offer for the buyer

 

Statements like ‚Äúthat‚Äôs too low ‚ÄĒ the seller will never accept it, and I refuse to write the offer,‚ÄĚ would appear to be an agent making a statement about what the seller will do without knowing what the seller would do in the situation of being presenting a low-ball offer. Phrases like this and similar statements will get an agent into trouble. The property, the transaction, the offer, is between the seller and buyer, and the agent should not interject personal preferences, points of view or policies as to what terms a seller may or may not want.¬†

Occasionally, a seller doesn’t want to see or hear about certain offers. The Cooperation, Access to Property or Offer Presentation section in the WB-1 Residential Listing Contract allows a seller to provide specific written instructions for showings and submission of offers. In this section, the seller agrees that the broker will cooperate and work with other agents, including subagents and the buyer's brokers, except as specified in the blank line near the end of this section. Technically, under the administrative rule, the seller’s direction to limit submission of offers does not have to be in writing. However to assure compliance with the seller’s instructions, placing these instructions in the listing or an amendment thereto would be appropriate ways to document the seller’s directions.

Upon the direction of the seller, the listing broker may communicate the seller’s requirements to cooperating agents so they understand why the listing agent will not draft or submit an offer per the buyer’s instructions. Per the buyer’s specifications, the buyer may have an attorney draft an offer, however the listing agent is still not required to submit the offer to the seller if submission is contrary to the seller’s instructions.

Withholding offers

Wisconsin administrative rules also emphasize that licensees cannot withhold any written proposal from presentation pending the party‚Äôs action on a written proposal previously presented. For example, a listing agent received three offers from three different buyers in one day; the agent communicated to the seller that the seller received an offer. After the agent talked to the seller, the two remaining offers are submitted. When presenting the offers to the seller, the agent decided to present the worst offer first. The agent stared at the seller for an uncomfortable amount of time and finally asked, ‚Äúwhat do you think? Yes or no?‚ÄĚ Once the seller said no, the agent moved to the next offer. This same scenario is repeated with the second offer before the seller gets to the final offer. What luck, the final offer was written by the listing agent! Since the seller rejected the other two offers, the seller felt obligated to accept the offer the listing agent wrote.¬†

The licensee is obligated to present the seller the three offers and provide the advantages and disadvantages of each as required under the administrative rule. Presenting all three offers at the same time provides the seller the opportunity to compare and contrast the three offers. A licensee who presents one offer, waits for the seller to make a decision, then presents another offer, and so on, is in violation of the rule. 

Promptly presenting offers and other written proposals

Licensees shall promptly present all received written proposals to the client or customer. Licensees are required to promptly present all written proposals to their clients and customers, in other words, buyers, sellers, owners, tenants and others seeking an interest in real estate or a business opportunity.

What does this mean? When you receive an offer, a counteroffer or an amendment, you promptly advise your client that they have received such document and promptly present that document to them. 

Responding to offers and other written proposals submitted

A licensee must immediately provide a written statement to the other party’s broker stating the date and time when the written proposal was presented if the other party or the other party’s broker request such a statement. The lines in the offer to purchase clearly delineate an area for the presentation of the offer to be documented by the agent presenting it. In addition, the licensee must immediately provide the same information regarding any rejection or expiration without acceptance when such a statement is requested.

The rule clearly requires all licensees to promptly advise their clients and customers whether the other party has accepted, rejected or countered the party’s written proposal. The agent who wrote the offer for the buyers can request that the listing agent provide a written statement indicating when the offer was presented to the seller and whether the seller acted on the offer by accepting or rejecting it or whether the seller let the offer expire. 

Although the rule clearly prefers that licensees try to have the party’s documented action as to an offer or written proposal, sometimes the party refuses. When there is no communication between the two agents regarding action taken by the party that received the offer or other written proposal, then the agent may document attempts to contact the other agent. If the agent has made such a request and the other agent does not respond promptly with a written statement, the agent or their broker may contact the listing agent’s employing broker regarding the matter. 

And one last thing … don’t forget to send the entire offer back! 

The entire offer to purchase and all associated documents must make a round trip

When an offer is submitted to the seller for the seller’s consideration, the entire offer must make its way back to the buyer. Basically, what goes around must come back around. For example, a nine-page offer to purchase is submitted to a seller for consideration, with an addendum A and a lead-based paint addendum. The seller wishes to accept the buyer’s offer, so the seller should sign the appropriate lines of the offer to purchase and any related addenda. All nine pages of the offer to purchase and all pages of any related addenda must be sent back to the agent working with the buyer. 

If the seller wishes to counter the buyer’s offer, the seller should indicate on the appropriate lines of the offer to purchase that he is doing so. The seller should send back the seller’s WB-44 counteroffer, any related addenda, and all nine pages of the offer to purchase to the agent working with the buyer.

Cori Lamont is Director of Regulatory Affairs for the WRA.

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