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The Business of Real Estate

Get it in writing

I was reviewing earlier today and came across this article:

Offers vs. contracts

It’s embarrassing to think that a licensed real estate allowed this confusion with a client.  The short version:

  1. Buyer-client and agent make offer for property;
  2. Negotiation reaches successful conclusion;
  3. Buyer’s agent delivers earnest money to title company, expecting executed contract to be receipted later;
  4. Listing agent informs buyer’s agent that seller has accepted another offer.

Fair?  Your call.  Correct?  Absolutely.  Should the listing agent have told the buyer’s agent that another offer was in play?  Depends.

The listing agent’s only obligations are to be honest with all parties, and to protect and promote his or her client’s interests.  Generally, my bias would be to work a multiple offer situation to gain the highest net price/proceeds for my seller-client, but multiple offers are a difficult situation for everyone concerned.  Rightly or wrongly, the listing agent in this case elected to negotiate with two prospective buyers without disclosing to at least one of the offerors that the other offer existed.

Real Estate 101 (at least in Texas):  No contract for real property is effective unless it is in writing and executed by all parties.  There is simply no excuse for the buyer’s agent in this situation to let his client believe that they had a “contract.”  They did not.

This is one of many ways that experience enhances the quality of representation a client gets from a real estate agent.  And how many years an agent has had a license doesn’t necessarily tell you what you need to know.  The last time I checked, the average Realtor® (member of the National Association of Realtors®) closed about 2 1/2 transactions per year.  That is NOT enough to stay up to date and practiced in the profession.  If the title company handled funds correctly, this misunderstanding didn’t cost the buyer-client anything but frustration, but they should have understood from the get-go that just making the first offer doesn’t mean anything, and that they did not have a contract until it was fully executed.

About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.


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