I was reviewing TexasRealEstate.com earlier today and came across this article:
It’s embarrassing to think that a licensed real estate allowed this confusion with a client. The short version:
Buyer-client and agent make offer for property;
Negotiation reaches successful conclusion;
Buyer’s agent delivers earnest money to title company, expecting executed contract to be receipted later;
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.