Failure to submit all offers: a reportable offense
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This article looks at the rule that all offers, written or oral and regardless of form, received by a seller’s agent must be promptly submitted to the seller for their acceptance, rejection or counter, and dispels the myth that California real estate brokers and their agents are only allowed to use real estate forms published by trade unions.
Arrogance in defiance of fiduciary duties
A buyer and his agent locate a property satisfying the buyer’s requirements. The buyer’s agent prepares an offer for the buyer to sign and deliver to the seller’s agent. The offer is written on a form with provisions in compliance with California law, but is not published by the seller’s agent’s trade union, the California Association of Realtors (CAR).
The seller’s agent, generally unfamiliar with the form the offer is written on and unwilling to read and review it, does not submit the offer to his seller. The seller’s agent advises the buyer’s agent that if he wants the offer submitted it must be written up on the trade union’s “standard” form.
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About The Author
Connor P. Wallmark
is a licensed real estate agent and the senior editor in charge of the first tuesday Forms and the Economic Trends in California Real Estate, Agency, Fair Housing, Trust Funds, Ethics and Risk Management, Real Estate Matters and Real Estate Principles books.
The problem is – many times you don’t know if your offer has been submitted or not because you don’t get any answer or feedback from the listing agent. I have been in limbo for 3 months on an all cash offer and the property is still being marketed by an out of town broker who is obviously fishing for a better offer.
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let’s call this practice the “prudential rule of conduct”. i have been advised numerous times by their agents especially “we don’t use non CAR forms here”. my advice to the agents is that the form of the contract is not the cooperating brokers to select. for years i used a form i had developed that is now in common use here in california, the ‘notice to perform’. it was a simple demand to take or perform some contractually mandated obligation but was universally seen as a poke in the chest by the agents who had not been educated in basic contract law and terminology. the fact that it was drawn on my word processor was what made them suspicious of it as it did not have the trade union imprimatur and they were not savvy enough to see it for what it was…a simple demand.
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The article makes clear that all OFFERS must be presented.
However, must a listing agent SHOW a property and/or provide its listing info if it is allegedly “in escrow” ?
When inquiring about properties, I’m frequently told that the subject property is “sold”, However, when I then ask specifically if the deal has closed, the typical response is that it is allegedly “in escrow” and unavailable. Occasionally, I’ll then ask if the seller has specifically instructed that it be taken off the market. Inevitably, the agent either states that he/she was so instructed or “checks” with the seller who supposedly confirms said unavailability.
Obviously, in these situations, I tend to suspect hanky-panky since there doesn’t seem to be any downside for a seller to try to obtain backup offers.
Does anyone have some advice on how to handle the foregoing situations ?
Thanks.
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I was a realtor in Illinois in the 90′s and I really liked Chicago’s way of insuring that everybody there saw/heard all offer(s) on the table. As soon as an agent had an offer, He/she HAD to register the offer within 24 hours and register the presentation time and date within 48 hours of writting the offer. and if there were more than one offer, all agents had to come to the one presentation time and present all offers to the seller. It was a fair way, I think, of making sure sellers heard all offers. And if agent failed to register an offe/presentation there was a hefty fine. I wish California had this system. How many times I have heard agents in CA saying “my seller took the other offer” well How do I know that it was even present it or that it was an in-office offer that they ‘preferred’.
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Perhaps this is something that the DRE should look into…It is very aggravating not to hear ONE WORD after an offer is presented…NOTHING…Perhaps I should turn the agent in to the DRE, as I presented this same offer (above) in July and the place is still being shown…No response whatsoever. It’s a reverse discrimination situation, where the seller’s agent is Hispanic and I’m not. He would not call me back until I had a Spanish-speaking friend call for me. (When I wanted to view the property).
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Simple cure! Request that you preseent the offer to the principal yourself. Present a “Upon Presentation” offer which requires a immediate respose of the ofer!
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Here it is March 5th, 2012 and the property I offered on is STILL vacant, and evidently has not closed. It was a repo – trustee’s sale. Very irritating that they are still using the same out of town broker.
P.S.
Upon Presentation offer – still receives NO response.
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I was licensed in California for 12 years and am now licensed in Utah. There are many things I preferred in California, but one good thing here is the handling of offers. At the end of the offer the seller is given 3 options and signs all offers. They may Accept, Counter, or Reject. You know the seller has seen the offer even if it is rejected. I have no problem with the seller rejecting offers, but I like knowing it is the sellers choice. Agents are going to get themselves in trouble if they act as deciders of what offers should be seen or not. By the way, why would you want to waste your time chasing properties that are in escrow, and sellers should have the right to take them off the market any time they like.
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On one or two occasions some years ago, I have submitted offers only to be told by the listing agent/broker that their E&O insurance only covers transactions initiated on CAR forms. It appears here, that is not the case and that an insurer may not dictate the form used. Which is correct?
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first tuesday Editorial Staff – An Errors and Omissions (E & O) insurance company cannot require a particular form to be used in a real estate transaction. No insurance company would create such a liability by dictating the specific forms to be used in its general business. Refusing to use a non-California Association of Realtors (CAR) form would also place the broker in violation of state law. The Department of Real Estate (DRE) clearly states that agents, under their fiduciary duty owed to their principals, must present all offers received regardless of the form on which the offer is written.
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