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Case #1-12: Presentation of Subsequent Offers After an Offer Had Been Accepted

Published Monday, April 6, 2015

The following Case Study was produced by the Professional Standards Committee of the National Association of REALTORS®

Adopted November, 1987 as Case #7-16. Transferred to Article 1 November, 1994.)

Realtor® A, the listing broker, presented an offer to purchase to his client, Seller X, which was $20,000 less than the property’s listed price. The property had been on the market for several months and had not generated much interest. In his presentation, Realtor® A told Seller X that, in his opinion, the offer was a good one and Seller X should consider accepting it. “With interest rates on their way up again,” said Realtor® A, “properties are just not moving the way they did six months ago.” Seller X decided to accept the offer and the transaction closed. Several months after the sale, Seller X filed a complaint against Realtor® A alleging a violation of Article 1, as interpreted by Standard of Practice 1-7. It had come to Seller X’s attention that a second offer had been made on the property after Seller X had accepted the first offer but prior to closing. This second offer, alleged Seller X, had not been submitted to him by Realtor® A and was for $2,500 more than the first offer. Seller X’s complaint stated that by not presenting the second offer to him, Realtor® A had not acted in his (the seller’s) best interest, as required by Article 1.

At the hearing, Realtor® A produced a copy of the listing contract, which contained a provision reading: “Seller agrees that Broker’s responsibility to present offers to purchase to Seller for his consideration terminates with Seller’s acceptance of an offer.” Realtor® A told the Hearing Panel that he had explained this provision to Seller X at the listing presentation and that Seller X had agreed to it, as indicated by Seller X’s signature on the listing contract.

Seller X admitted that he had understood and agreed to the provision at the time he listed the property, but he felt that Realtor® A should have advised him of the second, higher offer nonetheless.

The Hearing Panel found Realtor® A not in violation of Article 1. In their decision, the panel noted that Realtor® A had explained the contract provision relieving him of the obligation to submit subsequent offers to Seller X; that Seller X had agreed to the provision and had signed the listing contract; and that, while it was unfortunate that Seller X had received less than full price for the property, Realtor® A had fulfilled his obligations under the listing contract once the first offer to purchase had been accepted by Seller X.