Duty of Agent to Submit a Written Offer

Case Study:

This week we continue our series of emails analyzing Louisiana Court cases dealing with the duties of real estate agents and how agents breached their duties in some of those cases.

Hopefully, the readers of this email series have learned more about what duties are placed on Louisiana real estate agents and how not to breach those duties.

This week, we will discuss below a Louisiana 4th Circuit Court of Appeals case dealing with a real estate agent’s failure to submit a written offer on property.

Harris vs.  Poche, et al, 930 So.2d 165 (La. App. 4 Cir. 4/12/06) 

 On October 7, 2001, plaintiffs (who were prospective buyers) met with their real estate agent to view property for sale at 49 English Turn Drive.  Plaintiffs told their real estate agent they wished to make an offer on the property for $435,000.00. Plaintiffs’ real estate agent testified that although she considered that amount to be too low, she agreed to speak with the listing agent to find out if the offer was “in the ball park” of what the seller would take.

Buyers’ real estate agent testified that for the next two days, she called the listing agent to discuss buyers’ offer, and asked whether it was within a range that the seller might consider.  Cell phone records from the buyers’ real estate agent reflect several calls to the listing agent.  Buyers’ real estate agent further testified that the listing agent told her the offer was too low, and that he did not encourage or suggest having her write up the offer. According to the buyers’ real estate agent, the listing agent gave the impression that he had actually checked with the seller about the $435,000.00 offer, and that the seller was not interested.

(The listing agent would later testify he did not recall any discussions with the buyers’ real estate agent concerning the purchase of 49 English Turn Drive and whether $435,000.00 might be something the sellers would be interested in for the property).

Ultimately, the home sold to another couple for $425,000.00.

At trial, an expert real estate agent testified that it was the duty of the buyer’s agent to put the offer in writing (as opposed to discussing the offer verbally).  The following exchange occurred at trial between one of the attorneys asking questions and the real estate expert answering those questions:

Question:  So I take it, if you had gotten a call…..(from an agent that said), I’ve got a buyer interested in paying $435,000.00, I take it that you wouldn’t have said, no, that’s too low, and discouraged them?

Answer:  Absolutely not. I’d have told them, write that offer, let’s get it presented. And that’s what the duty of that — of the agent would be, is to write that offer.

Question:  And you would encourage that?

Answer:  Absolutely.

Question:  You wouldn’t discourage it?

Answer:  I would never discourage any offer. It begins communication.

In light of this testimony, the court found the buyer’s real estate agent breached her duty owed to the buyer by failing to write an offer on the property and submitting that written offer to seller for consideration.

A couple of thoughts about this case:

  1. Writing an offer and submitting it to the listing agent prevents the “he said, she said” testimony about whether an offer was ever discussed between agents;
  2. During the closing process for any house, phone conversations about certain items are inevitable. Make sure you document in your file all phone conversations by noting, at the very least, the date, time, with whom you spoke, and what was discussed (sending a confirmatory email to that person about the conversation is also preferred).

 

For any questions concerning this email, please do not hesitate to contact me at rye@tutentitle.com.

H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC. Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.

The information contained herein is simply for informational purposes only and not intended to provide legal advice or create an attorney-client relationship.