How Should Sellers Handle Multiple Offers On The Same Property At The Same Time?

Question

I represent the Seller. The home has been listed for about a week.  Over the weekend, I received multiple offers on the home.

Do I need to present all of the offers to the seller or just pick out the best one and submit it to the Seller?

If the Seller wants to respond to all offers, what should I do?

Help!! How do I handle this situation?

Answer

According to Louisiana Revised Statutes 9:3893, a real estate agent has a duty to “timely present all offers to and from the client.”  So, you need to submit all offers to the Seller.

However, all real estate agents must keep in mind, “You can’t sell the same house to two, different Buyers at the same time.”  So, you need to advise the Seller that in response to the multiple offers, the Seller should not submit multiple counter-offers to multiple Buyers at the same time.  (If the Seller attempts to negotiate two counter-offers at the same time, the Seller could be faced with two contracts on the same property.  This would not be good!).

The prohibition against submitting multiple counter-offers on the same property to multiple buyers is discussed in the case entitled, Markovich vs. Prudential Gardner Realtors, et al,  2010 CA 1886 (La. App. 1 Cir. 7/1/2011).  (Although Markovich was not designated for publication, it gives us an idea of how Louisiana Courts feel about signing multiple contracts on the same piece of property).

In Markovich, Seller’s real estate broker received two offers from two, different buyers on the Seller’s property.  In response, the Seller’s real estate broker provided two counter-offers to each buyer giving each potential buyer nearly the same amount of time to respond.  Of course, both buyers accepted the counter-offers and litigation ensued.

At trial, the real estate broker testified his real estate agent should not have forwarded two counter-offers on the same property to two, different buyers.

The Trial Court held that by forwarding two counter offers to two different buyers for the same piece of property, the real estate agent breached his fiduciary duty and the Trial Court awarded damages totaling in excess of $700,000.00 adverse to the real estate broker.

So, with all of the above being said, when faced with multiple offers, it might be best for the Seller to choose one of the below options:

  1.     Pick the best offer and negotiate with that particular Buyer; OR
  2.     Let all the potential Buyers know there are multiple offers on the Home and request the Buyers submit “Their Highest and Best” offer for the Seller to consider.

 

Please make your Seller aware that if he/she chooses option #2, he/she run the risk of some or all of the Buyers rescinding their Offers because they don’t want to get into a bidding war.

Additionally, and as a side note, a couple of years ago in Lafayette there was a “Counter-Offer” form being used wherein the Seller submitted multiple counter-offers to multiple Buyers but reserved the right to rescind at a later date any counter-offer even if the counter-offer was accepted by Buyer.  In response to the Markovich case, I think this form was removed from circulation in Lafayette.  If this form still exists, I DO NOT recommend using this form.  Brokers, please check your forms!!