How do I know if my offer is really presented to the seller?

Question

There was a property and our bid was 10% over asked. Option period 5 days and almost 10% earnest money. Have bank commitment letter lined up even my agent said it is a real solid offer. We didn't get it and there was minimal feedback from seller agent besides thank you blah blah blah..

So I recall a conversation at the open house and there were some side discussions where the agent said they like to keep the transaction in house, having the same agency represent both buyer and seller.

So without any other information, would it be possible that the seller's agent "missed" my offer and present the best offer from his agency?

Sorry if this is a amateur question.

Charlie MacPherson · Answer

@Mark Ham Assuming that it's not too late, one thing you can do is to send a copy of your offer along with a cover letter directly to the seller. If I were doing that, I'd send it via FedEx to get it there quickly and to make sure that envelope gets attention.Your agent can't do that as it would be an ethical violation and could possibly be construed as tortious interference, but I don't know of any reason that you can't.

Jeff Chen · Answer

@Mark Ham As Texas is a non disclosure state, they are not required to disclose what it sold for, which will make it even more difficult. Some states double-ending is normal (represent buyer and seller). In California, it's looked down on. We either represent buyer or seller. If you found my comments useful, could you help upvote? I'm just starting out on BiggerPockets. Thanks!

Matt M. · Answer

You don't know. We go on the word of the other agent.

Jeff Chen · Answer

Hi Mark,There is never an amateur question. How to know whether your offer was really presented to the seller, will depend. We always build rapport with the selling agent to get a feel for what type of agent they are whether we would be considered in a multiple counter situation, how many disclosures sent out and expected number of offers. If in a strong sellers market, there is always possibility that you you won't get much feedback if your offer was low. Just this week we wrote 3 offers for 3 different clients, first offer had 15 offers, we were #13 (Listed price $989,000 - ended up selling for $1.2m - $100k above the comparable homes in our CMA (Comparable Market Analysis) we had no response until the next day after ratified since we were considerable lower even though we offered at $1,080,000. 2nd offer had 8 offers, we were top 2, and were contacted immediately and given the chance to counter, we lost out by just $10k but this was over market price and buyer wasn't ready to come up with the price. 3rd offer there were 17 offers, and our buyers put in their best foot forward, we had immediate contact once offers were due, and ratified that night. I'm sure the selling agent may have been so busy with us that night working with the top 3 offers (countering, negotating) and the other 14 offers probably didn't get much of an answer until the next morning, sometimes none at all. When I'm on the listing side, I like to contact each of the buyer's agent to let them know because it is a lot of hard work, and will help the get a gauge of the market activity especially since they might be competing with those same 13 buyers for the next home. We have a shortage of inventory here in the San Francisco Bay Area!In most cases, the offer should have been presented to the seller, but I myself was in a situation where I have seen an agent disregard our higher offer to an agent that was double-ending the sale. We only found that out "after" the sale closed (30 day later) and we happened to see who sold the property and how much it went for and it was BELOW the price we offered. At that time I did not have my license and my father was the broker representing it. He was old school and more of a commercial agent, so he didn't build rapport with the selling agent to find more about the activity level of the property. Check in 30 days after the home closes, find out the difference of what it sold for versus what you offered. Did you have any contingencies? Inspection Contingency, Loan Contingency, Appraisal Contingencies? Here in Bay Area, the only way to make a solid offer is NO contingencies..Where are you buying?

Dan Maciejewski · Answer

Officially, there's no real way to know if yours was presented or presented fairly. We hope with our code of ethics that we all follow it, but when it comes to money, some people send ethics out the window. The most we can ask for is a letter stating that they presented the offer. If someone isn't presenting offers, they can surely lie in a letter!In my MLS, sometimes you can see if the seller is paying a different commission whether there's one agent or two, but 90% of the agents don't know what it means. There's a box to check called "dual/Variable Commission." That's supposed to let us know if the seller is paying less and might favor an offer written by the listing agent. But honestly, even if they are paying the same, the agent gets double and could push an offer written by themselves. All that said, you might have lost for any number of reasons. The offer was most likely presented. I have recently lost on offers with 30% financing, appraisal waived, no inspections. . . Cash offers with 2 week closes and no inspections are winning sometimes. @Jeff Chen is pretty spot on. In multiple offer situations, the listing agent doesn't have much incentive to give feedback to all the offers that lost out.

Bruce Lynn · Answer

I expect all offers are presented....there may be cases that it doesn't happen, but I think that would be rare. Maybe other offers were lower, but offered free 60 day leaseback to the seller? That might be attractive to some sellers who need to move. Maybe the other offer was for cash and offered to close in a week. Maybe one offered 50% earnest money. There are so many other moving parts of the contract that are different than price.... Lots of cash offers out there....lots....like in my market they say 1/3 offers are cash....that's not just investors, sometimes from owner occupants. There are plenty of crazy agents around, some that might try to double end a transaction to make more, but I think that is rare and super risky. Just as someone mentioned above, what if they found out your offer was higher somehow. By FedEx or otherwise....and seller confronts the realtor...they'd be in a world of hurt. You can offer to pay title, pay for a survey, waive home warranty, put plenty of option money or no option period, waive entirely the appraisal contingency and other ways to make your offer stronger.The good news is in my experience is that you'll find a better house, or one better priced, or in a better location, or something you like way better than this one, even if it doesn't feel like it today.

Russell Brazil · Answer

Keeping it in house isnt nessecarily unethical either. Many agents will use whats called a variable rate commission, so total commission is lower if the property is in house. So a lower offer, but with less commission due can equate to a higher net for the seller.Also, price isn't always the determining factor. Inspections, appraisals, strength of the lender and buyers agent, whether someone is a first time home buyer verses experienced home buyer all go to the strength of the offer.

Kelly Sennholz · Answer

I've had an agent do that, withhold an offer from me, the seller, so he could negotiate a higher fee for himself, both ends of the deal. I found out because the buyers really wanted the property and did some legwork to find me, asking why a full price offer had been denied. That person is no longer a realtor.

James Carlson · Answer

@Mark HamHere in Colorado, the listing agreement between seller and agent has a section laying out the legal duties the agent has to the seller. One of them is "presenting all offers to and from Seller in a timely manner." So it would be a breach of contract for that agent to not show your offer.But this reminds me of a common skepticism I see in buyers about the ethical nature (or unethical nature) of real estate agents. I'm interested in how other agents handle this.In our stupid hot markets of Denver and Colorado Springs, we occasionally use an escalation clause for our buyers' offers. (Buyer shall pay $X,XXX above the highest offer up to a max of ...) I always make that provision contingent upon receipt of the other higher offer, but any good listing agent redacts the names of the buyer and the other agent. So smart buyers ask, "How do I know they didn't write a fake contract to push up my offer?"Well ... you don't know. But you've got to think that one of two unlikely things would have to happen. The listing agent forged an offer themselves; orThey got another agent to create a phony offer. So you either 1. You have one agent risking their license (and livelihood) over $10,000 for their client (which is about $300 in extra commission for the agent); or 2. You have two agents risking their licenses for a measly $300, one agent who gets nothing out of this except risk.At the end of the day, I have to trust that no other agent would risk so much for so little. Any thoughts from other agents?

Lucia Rushton · Answer

@Mark Ham. It is sad and I’m sure true that there are agents that want to keep a sale inside and may do whatever it takes to make that happen. But in the multiple offer situation, $5-10k over is nothing right now. Lost out to $30K over and guaranteed above appraisal on a $248,000 basic home. It is very much a sellers market right now. And almost worse than 2020.