In real estate, one of the most difficult challenges is dealing with multiple offers on a home. From the start, it is set up for one party to receive a call of congratulations while the other parties receive a condolence call.
We like to use the term win-win in our industry — and clearly, this scenario cannot be a win-win.
Due to the timed deadlines and number of people involved, there’s a well-honed art of how we handle multiple offers. Even those of us with decades of experience pause and go into a particular mode of formality when we are the listing agents in this situation.
The professional standards give several options for how to conduct multiple offers — ultimately, they leave the seller in the director’s chair.
Realtors are to act accordingly, but here is where the important agent-to-agent relationship should come into play.
In all forms of negotiation, trust is the most important aspect.
In working a multiple-offer situation, there is a point where the written offer is used as a basis and verbal conversations ultimately ensue to iron out the terms. This is done in the interest of saving time because the clock ticks faster than normal with anxious buyers sitting by their phones.
The call they’ll receive will solidify news of where they will live, and that is a very important aspect in our lives. Hence all the emotion, stress and expectation that is wrapped up in this.
When this verbal back-and-forth takes place between Realtors, there is a moment where honor and trust are crucial. That moment is when the listing or buyer’s agent says “we have a deal/acceptance of terms and I will get the paperwork to you to formalize it right away.”
The gray area
At this point, calls are made to the sellers/buyers updating them about the exciting news, with the formality of signature ensuing. Right or wrong, people mark this time as “it’s a done deal.”
In reality, the real estate law is written so that until a document is signed by all parties, it is not official — and that the seller ultimately can accept another offer.
It rarely happens that the verbal acceptance isn’t honored. Seasoned or well-trained Realtors advise sellers that they have committed to someone and that the bidding period has ceased.
If another offer slips in during the paperwork finalizing, the listing agent commonly tells the new offeror or buyer’s agent that the house is under contract and that signatures are in the works. This is where trust and good practice come into effect.
Teaching new practitioners in any profession how to handle the gray areas is one of the most important things that can occur.
This is where terms like “professional standards,” “ethics” and “good will” come into play. It’s when those impressions are set about whether one conducts business in such a way that another agent can trust him in future dealings.
When trust is broken
Agents, buyers and sellers can view the relationship between agents as either colleagues or as competitors. And when the agent relationship is not honored, havoc occurs.
Once an agent breaks trust with another agent, that relationship is harmed for future dealings, and it can taint everything moving forward. Grudge holding — no. Being cautious is more accurate.
The sidebar is that agents have strong networks, and an informal swirling list of who can be trusted and who is looking out for themselves instead of the transaction or public at large.
Years of practicing real estate causes someone to see more than you could imagine as you excitedly start out in this career. It’s emotional for your clients — and therefore, it can be emotional for us as Realtors when we see unprofessional behavior.
The days of a “handshake deal” are long gone, but who says we have to discard the principles and honor that made it work for centuries?
How you behave in the gray areas matters. Character depends on it.