Accepted offer then realtor presented another offer
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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10yYes, it is legal, you are out. A verbal offer//counter offer/acceptance means nothing, only a signed contract has any meaning.
Edit: By the way, the seller's agent did exactly what they should have done, and would have been liable to the owner had they not presented the other offer, since they did Not have a fully executed contract with you.
25 Replies
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes10y
Yes, it is legal, you are out. A verbal offer//counter offer/acceptance means nothing, only a signed contract has any meaning.
Edit: By the way, the seller's agent did exactly what they should have done, and would have been liable to the owner had they not presented the other offer, since they did Not have a fully executed contract with you.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes10y
Sadly from what you described I think you are out of luck.
In most if not all states, real estate contracts have to be in writing. Until both parties sign the contract there is no contract. If the seller had sent you the counteroffer in writing and you signed it the minute your side called back to say accepted, a contract would be formed. Since the counter offer was verbal, I very seriously doubt the seller can be held to it.
Now agents hate lawsuits so if he offers are close maybe being aggressive would help your side. Your attorney can advise you on that.
I am not an attorney and the above is not intended as legal advice. It is what I learned in agent classes in MD.
- Real Estate Broker · Fairfield, CT · Member since 2015 · 312 posts · 231 votes10y
I hate when this happens. They did nothing illegal; there is nothing your attorney can do; and as noted above, the listing agent would have been liable for NOT presenting the other offer. Only writing matters. It sucks, I have lost 3 properties this way this year. If you can come up - go for it; otherwise, time to move on. Sorry!
The law in Maine is that once acceptance is communicated you have a contract. However, you can't prove it was accepted without a written contract. That is, unless you have an email or voicemail that proves it. Even then, is it worth the fight? It will be expensive to sue for specific performance and you'll have an angry, uncooperative seller.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes10y
@Kaylyn T. The verbal counter offer, and your verbal acceptance are meaningless. As per your post, they were waiting for your revised written offer at that price. Once received, that would have to be presented, but not necessarily accepted/executed.
- 10yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
Here is where you really need to know all the details. I am licensed, but not in Maine. Let's see if we can get this all straight.
You presented an offer in writing.
The seller directed their agent to counter offer. Was this counter offer sent to your agent in writing, or was it strictly verbal? Real estate contracts to buy and sell must be in writing in order to be valid.
The selling agent directed your agent to write up your acceptance. This is the part that gets hinky for me.
If the seller's agent gave the complete counter offer, signed by the sellers, to your agent, and you signed it, then you have entered into a contract.
If the seller's agent verbally countered your offer, and your agent wrote up the counter offer, then you signed it and sent it over, you do not have a contract until the seller signs it.
So, technically, this agent hasn't done anything wrong, and the timing just stinks.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
Let me first say this is not legal advice of any kind. States are founded on various kinds of laws which vary by region.
The value of attorneys is knowing how courts react to certain situations presented to them and case law rulings.
Some states the contract has to be in writing to be enforce able. There is a big difference between an enforce able contract and a legal contract. A verbal contract in some states is legal but generally not able to be enforced in a court of law. Even if it was enforced parts of a contract can be still deemed to be too vague and stricken out of the agreement by the courts.
The reality is you were excited about getting the price you want and now are not happy about a multiple offer situation. You win some and lose some.
With my clients on commercial deals I ask key questions to the listing broker ahead of time. We might have a 1031 or other sensitivity requirements with interest rates to lock in. So for instance with a property at 5 or 10 million the question I ask the listing broker.
" If your seller was given a good offer that was reasonable by a strong buyer would they go to LOI and proceed with us OR Are they looking to hold offers for 3 weeks and have multiple rounds of bids to extract another 25 basis points on the sales price? "
The answer to this question lets me know what their plans are. I do not waste time with offer dates and multiple rounds of bidding requested by the seller. It is a waste of time for me and my clients. Waiting 1 to 2 months while market dynamics can change just to see if a seller accepts there are too many properties where you do not have to do that.
Having said all of that my experience is if a property is new to market you can get some off but if you ask for a lot off the seller likes to sit on that a few weeks and see what else comes in. Sometimes they have no intention of accepting your offer but use your offer to entice another buyer up closer to what they want in price.
Real estate is a contact sport and a property is just a property. No matter what you do you will win some and lose some. Just because a property goes under contract does not mean you have lost. Sometimes they fall out and i get a call back from the listing broker.
One day I will think one property is a lock at 10 million and that one doesn't work out but then a 12 million does. You have to stay fluid in this business and have an A,B,C back up plan in place.
Hope it helps.
Thanks for your replies everyone. I do understand that the contract isn't legally bound until it's signed, but I was curious if the realtor was ethically obligated to present his client my accepted counter offer once it was presented - meaning now we are in negotiations and there is an accepted offer. Particularly since he asked my realtor to write up the acceptance offer because he wasn't in the office - and thereby all other offers would be considered back ups. After all, he didn't get another written offer until much later in the day, so he basically sat on our accepted agreement, not telling the seller we had accepted it, until the offer came in.
It's tricky, but anyway I do get the general consensus - it wasn't yet in writing so the point it mute yada yada. I still think there is more to it here.
Anyway, @Amy A.curious if you know where I can find the language for what you're referring to
The law in Maine is that once acceptance is communicated you have a contract.
I can't find a lot online about the specifics of Maine real estate law and I know it varies from state to state. If you can point me to something online I'd be very grateful.
Thanks everyone! Great to have a place to ask questions like this and actually receive answers! Kaylyn
The reality is you were excited about getting the price you want and now are not happy about a multiple offer situation. You win some and lose some.
I was ecstatic @Joel Owens, because I was prepared to pay 175! The point is not the price here, it's the realtor not telling his client I accepted her counter offer and then calling around to try to bid me up. To me that is just some shmarmy tactics. And I live in LA - I am no stranger to shmarm. Perhaps to most realtors this is a brilliant way to do business, but it seems like when the seller and buyer agree to price and terms and the contract is there ready to go, you give it to your client to sign, not start calling around to juice up the price and sit on it. It seems unethical. And if this is all completely fine and ethical @Wayne Brooks, then how to avoid it happening again is the real question. By the way, I am not "out" yet. I'm just strategizing.
We talked about this situation in my licensing class a few years ago. I don't have time to find the actual law number or go through my messy notes. I doubt you could enforce it in court anyway. The instructor gave the example of a phone call where a listing agent says "He accepts your offer" before the buyer agent can say "she rescinds her offer". Good luck ever enforcing that verbal contract!
Also, we talked about "shopping an offer". No, agents are not supposed to do it, but you know it happens. However, if the agent knew another offer was coming in, there is nothing wrong with both the seller and agent waiting the time your offer allotted to respond, in hope that the other offer is higher.
One point to consider is that their agent may have actually presented your acceptance while knowing another offer might be coming. By telling you the acceptance wasn't presented before the other offer came, the agent could be trying to distance the seller from accountability here. Not that the seller is actually susceptible in this situation, but there could more to the story.
In reality, if it's not in writing, it didn't happen so best of luck with future deals!
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
The broker/agent might not even be a REALTOR. State real estate commissions care about license laws and protecting the interest of the general public. They generally care nothing about third party organizations ( NAR, MLS's, etc. ).
The ethics agreement is a section of NAR that brokers/agents agree to as a member. Just because they are a REALTOR does not mean they have ethics or vice versa.
Plenty of awesome brokers/agents out there that are not REALTORS by choice.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
If the seller is a bank they generally have language stating until you receive back a fully unchanged signed contract back from them you do not have a deal and until that time even with verbal agreement they are allowed to accept other offers, counter, or decline your offer.
Originally posted by @Kaylyn T.:
how to avoid it happening again is the real question.
Hi Kaylyn - Sorry to hear of your issues. I think you are getting some pretty high horsepower advice here from a few real professionals. @Joel Owens answered your question pretty succinctly, and personally, I think it's great advice!
With my clients on commercial deals I ask key questions to the listing broker ahead of time. (...) the question I ask the listing broker:
"If your seller was given a good offer that was reasonable by a strong buyer would they go to LOI and proceed with us OR Are they looking to hold offers for 3 weeks and have multiple rounds of bids to extract another 25 basis points on the sales price? "
The answer to this question lets me know what their plans are. I do not waste time with offer dates and multiple rounds of bidding requested by the seller.
Best of luck next time!
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes10y
Originally posted by @Kaylyn T.:
- the seller's agent doesn't have to tell the seller that I have accepted their offer and present her with the contract? He can legally sit on my acceptance to 'field' other offers?
Yes he does have to present your offer, but if he knows another offer is coming in immediately he can suggest the seller waits for the other offer. The counter tactic is to say "my offer is good for one hour". Since the seller proposed the counter offer that you wrote up, that is a reasonable request. You would be putting them in a position of take my offer or take your chances on the other expected offer.
Technically you didn't accept a counter offer. You wrote up a new offer based on what the said they would accept. The agent is legally required to present the offer but I do not know how timely that presentation needs to be. But you didn't even say that the real estate agent did not present the offer. You just know another offer is coming in and that presumable the Seller will wait for that offer before deciding.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes10y
@Kaylyn T. His behavior is not shmarmy or unethical at all. The listing agent has a fiduciary duty to his seller. They have no duty to you the buyer what so ever. If you were willing to pay up to $175k then you should have bid that, or at least added an escalation clause to your offer that went up to that. All the time on BP I see buyers complaining about listing agents doing x, y or z, when they are merely just doing their job which is to help their seller, not the buyer.
Put yourself in the shoes of the seller. If you were the seller and your agent ratified that contract, and another offer came in for higher, you would be livid. Ive had offers come in just as we are about to sign a contract to ratify, and it is my legal obligation to present that offer no matter how close to ratification we are. Im actually supposed to present offers even if they come in after a contract is ratified.
District Invest Group545 Reviews Hey @Wayne Brooks, @Amy A., @Mindy Jensen, @Joel Owens,@Ned Carey, @Doug N., @Russell Brazil, @Ron H. I wanted to reach out and thank you all for your opinions and advice about my little Friday night realtor crisis. Here's what happened.
First a little back story. The house is a 6-unit property. It had been on the market for 275k listed in June. In Septemeber the price dropped by 76k to 199k and still no movement, but a lot of lookers. The market in mid-coast Maine hasn't quite bounced back like a lot of the country. Definitely not like what's happening out here in LA. I asked my realtor to ask the listing realtor some questions - basically to get to the point of the huge price drop and why she was selling. Turned out the owner's husband had recently died and she simply wanted rid of it, but the realtor said it need about 60k worth of work. After running the numbers, I figured if I could get it for 175k it would work for me. But my realtor suggested that based on her conversation with the LA, we should offer 150. Which is why I didn't initially offer 175 as you suggested Russell.
I sent my offer in on October 22nd, but the listing agent was in a real estate class all day in Boston, so he couldn't present the offer until he got back on the 23rd. Not sure why he couldn't have presented via email, but for whatever reason it didn't happen. Had he presented it on the 22nd, none of this would've likely happened.
Upon reading the offer Oct 23rd, the owner almost immediately countered with 165k final and I accepted - but that's where it gets weird because the listing agent asked my agent to put the deal together for him. He didn't get the seller to sign the counter offer as he should have. And in the time that my agent rewrote the contract, and emailed it to the listing agent, that's when he said he had another offer and to present my best and final.
As I mentioned earlier, I had already run the numbers and was prepared to go to 175k, but boy it sucks doing that after you already got an agreement for 165. Regardless, I did got up to 175.
Then I did the following: I contacted my realtor and told her she had to push him on the fact that he did not present the counter offer in writing and therefore I could not sign off on it immediately, and that it was because he was in meetings all day the 22nd that the offer wasn't presented earlier. The two realtors happen to be a part of the same agency but located in different towns. My agent called her designated broker, who called and I guess reprimanded the listing agent for not following their protocol. The listing agent at some point went back to the seller and I guess told her what had transpired. According to him the owner felt guilty about the whole thing, and said she would accept my offer at 175k. Which according to the listing agent was still less than the other offer than came in.
Now I'm not sure exactly what all happened behind the scenes up there - I am currently in escrow - but the listing agent is no longer with the agency. He left shortly after this all went down.
One additional thing, after I had my contractor go through the property and come up with list of repairs needed to bring the building up to code, I renegotiated with the seller to 165,450k. That's where we currently stand. Hopefully everything will go smoothly from here forward. Inspection tomorrow. I close December 15th. Nuts!
Kaylyn
- 10yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
Thanks for the update, @Kaylyn T. Fingers crossed for a smooth transaction at closing.
Thanks @Mindy Jensen! Really appreciate your comments!
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
Kaylyn on the residential side there are a lot of part time agents and newbies to the business. 90% of new agents go out the first year. Out of the remaining 10% left over about 80% of those are gone within 5 years. The reason is they come into a hot market cycle for a few years and when deals do not fall into their lap anymore they do not know how to survive and leave the business.
I hear about a lot of people getting into residential because the markets are HOT again and everyone is making money etc. They can make 50k or 60k a year but when things cool off and they drop to making 25k they go part time or leave the business etc.
I saw all of this before back in 2004-2007 before the last downturn. I do commercial real estate so a different environment but I did some residential way back when for friends and family.
If you are getting excuses you can always approach the broker in charge or principal broker of that company. The agent is just working underneath the broker but the client relationship is with the brokerage and the seller in the listing agreement. There is an independent contractor agreement that each agent should follow that a brokerage has on what to do and what not to do etc. with protocols when they signed on with the company.
Sounds like the agent was just inexperienced, possibly lazy, or both. No way to tell as we were not involved or a party to this transaction. Maybe in the end it will all work out..... : )
Hey @Joel Owens, thanks for your opinion. I think this situation was just the opposite - this guy is older, definitely late 60s I'd say, and a real estate veteran. I don't want to presume he didn't have the mobile technology to present the offer the day he got it because that makes me sound ageist and I know a lot of older folks who are very technically savvy. You're right we will never know. My agent seems to think he didn't like the fact that a larger agency, which I won't name, recently acquired their agency and had policies he didn't agree with and that he just did something some way for so long that he wasn't adjusting. Whatever the reason, hopefully things will all work out in the end. Thanks again, Kaylyn
Never a dull moment in real estate! It sounds like it'll all work out for you. When I'm told to present my "highest and best" it's always difficult to know if I'm being lied to. I buy a lot of Fannie Mae foreclosures, and they always send me a multiple offer/ highest and best disclosure form to sign. One time I got it after my offer was already accepted! There are a lot of games people play, but as long as you are confident in your numbers, you'll be okay.
- Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes10y
I know many brokers that suggest calling agents that might still be interested in making another offer before signed copies are exchanged.
Here is how it works... They say on the phone the seller is accepting. That ties the buyer up. Then they call everyone that has made an offer or done a recent showing. A chance to beat the offer is given. The offer price may or may not be revealed.
They might even send out a "last call" email out to everyone in their office.
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