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What does the NCREC by "answer questions about multiple offers honestly?"

In the previous screen, the NCREC information officer wrote, "A broker is not required to disclose a multiple offer situation but should answer any questions about whether or not there are multiple offers honestly. The broker should follow the direction of their seller in what the seller wishes to be communicated, but the broker also should not “go dark” and fail to respond to contact attempts by buyers and their agents."

I was recently asked to interpret those two statements and to clarify them.

Here are my thoughts:

We have to consider two different sources on the issue of disclosing multiple offers to buyers or buyers' agents.

• The NCREC does not consider the fact that the seller is entertaining multiple offers to be a material fact.  The listing agent does NOT have to tell you whether there are other offers.
• However, the NAR tells its members "With the seller's approval "...divulge the existence of offers on the property" consistent with Standard of Practice 1-15."

So there is a slight conflict between what the NCREC advises and what the NAR advises. (Remember that not all brokers are Realtors, but all Realtors are brokers.  That means we ALL have to follow NCREC rules and laws.)

First, I would suggest that all listing agents discuss the possibility that multiple offers will happen in this market and for sellers to determine their probably response to such a situation. If sellers want to start a bidding war, it would be advisable that this information be put in writing for the listing agent's record.

Second, I would also suggest that buyer's agents tell their clients to ASSUME that there are multiple offers on most properties in this frantic market and to act accordingly.

Now, to answer the issue more directly:

If you are a buyer agent, ASSUMING you are a Realtor, you have the right under the Code of Ethics, to get a written response from a seller working with a Realtor regarding the submission of YOUR offer. You are NOT entitled to information about whether there are other offers or what the terms of those offers are. You can use the 340-T for the purpose of confirming that your offer was submitted.  Here is what is written in the NAR Code: "Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall, as soon as practical, provide a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented."

But again, that doesn't mean that the listing agent has to tell you that there are other offers if the seller has not advised accordingly.

The NCREC's policy has always been honesty and fairness to ALL parties. While brokers should respond to each other with some degree of urgency and with professional courtesy, a broker may remain silent (which is not the same as ignoring a question)  when asked questions that don't necessarily require disclosure. We can also answer indirectly.

For example, let's say a buyer asks me "Did anyone die on this property?"  The death of an individual on or in a property is NOT a material fact.  I can say nothing, or I can direct them to a resource that might answer their question, or I can say, "That is something you certainly can research on your own, if you would like."  So I can't lie, but I can deflect--in other words, not answer the question directly.

Let's take a look at another example.  If a buyer says, "Are there purple people in this neighborhood?" I would have to affirm my obligation to fair housing and tell the buyer, "I am sorry but I cannot respond to that question due to fair housing considerations, but you are welcome to check out the neighborhood yourself." 

So my answers depend on the question, but my response DOES have to be honest if I make a statement. I am not allowed to misrepresent or lie. 

If my seller has directed me to NOT discuss that there are multiple offers on the property, I would say to a buyer or buyer/broker, "As you know, this is a hot market and my listing has had a lot of activity (assuming that is a truthful representation.)  I would encourage you and/or your buyer to submit your best offer as quickly as possible.  I will be happy to submit it."  This would be an example of an indirect  but an honest response.

Again, I cannot lie in response to a question about whether or not multiple offers exist, but I can be circumspect in my response if my seller has not given permission to discuss this issue.

Remember, the NCREC also says that if I am given permission to discuss that multiple offers exist, that information must be shared with ALL buyers/buyer agents.

Hope that helps.

Your teacher,

Debbie

Teacher Debbie Long

Submitted by My Favorite Realty Inc. Paula Fields 336-543-8683