No Really, An Offer Is Not Binding...Hello!!!

By
Real Estate Agent with Tutas Towne Realty, Inc. SL3226489

I had a buyer’s agent call me today and tell me he was upset because we have multiple offers on my short sale listing in Davenport, FL. He called on a Friday and asked if we had any offers (at the time we didn’t) and I told him no. However, the price was just reduced that morning and we would likely have offers come in over the weekend because the new listed price was very competitive. That evening I received his buyer’s offer and called him to let him know I had it and would be forwarding it to the seller.

Over the weekend we did indeed get multiple offers, as I suspected we would. So on Monday morning, in the interest of fairness, I sent out an email to each buyer’s agent letting them know we had multiple offers and needed their buyer’s highest and best offer. This particular agent called me and was quite upset that I had presented other offers to the seller. His words exactly were “In our offer, we checked the box in the short sale addendum that the seller can’t accept any other offers.” To which I responded “What are you talking about?”

The Florida FAR/BAR short sale addendum does have this clause in it. Here is the clause in question.
A Contract Is A Contract When Both Parties Have Signed
A buyer and seller of a Short Sale can either decide to let the seller accept back-up offers or not. Anything is negotiable. If we had an executed contract and option A was checked then yes, he would have cause for concern. However, the last time I checked, an offer only signed by the buyer is not an executed contract. It’s just an offer. No matter how many classes you take about distressed properties or distressed property designations you have (this guy had them all) if you don’t know the law (as in your state’s contract law) you can’t succeed in this business.

Everything in real estate, and business for that matter, has to be in writing. An agreement or contract between the buyer and seller is not binding until BOTH PARTIES HAVE SIGNED IT. It’s a tough market right now and I understand there is some emotion involved, but we have to step up as professionals and there is a minimum mount of knowledge every agent should possess. Let’s step it up for our customers.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Debbie DiFonzo 09/22/2011 12:45 PM
  2. Gayle Beyer 09/22/2011 03:15 PM
Topic:
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Location:
Florida Polk County Davenport
Groups:
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Diary of a Realtor
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Show All Comments
Rainer
180,033
Tatyana Makarov
Coldwell Banker Residential Brokerage - South Windsor, CT
Your Greater Hartford Area Realtor

Wow, Nathan, that is scary to me that some agent like your buyer's agent are in our business today... They sure need to be educated.

Have a great day.

Sep 22, 2011 10:01 AM #64
Rainmaker
893,858
Michael Setunsky
Michael's Commercial LLC - Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nathan, some people have to learn the hard way or at least read the terms of the offer.

Sep 22, 2011 10:03 AM #65
Ambassador
1,228,639
Tammie White
Benchmark Realty, LLC (615) 495-0752 or www.TWRealtyGroup.net - Franklin, TN
Franklin TN, South of Nashville

Maybe you should anonymously send this post to his broker. Too funny. Now, I've heard it all.

Sep 22, 2011 10:05 AM #66
Rainmaker
648,019
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Good Lord. Did the chap realize that he was making a donkey out of himself? There are just some mistakes that should never be made, nor vocalized....

Sep 22, 2011 10:54 AM #67
Rainmaker
171,209
Rajeev Narula
iPRO REALTY LTD.,Brokerage - Mississauga, ON
My Services Are All About You!

I loved this....and Donne Knudsen's smiley....that was me when i read this!!

Sep 22, 2011 11:30 AM #68
Ambassador
1,252,828
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

I had a situation this week where we did NOT have a fully executed contract, yet buyer thought they did and even ordered inspections. I told the agent over & over please get me their initials on a counteroffer. They did not, and another higher offer came in, which was accepted. Until it's fully executed anything can happen.

Sep 22, 2011 12:32 PM #69
Rainmaker
403,246
Richard T. Dolbeare
Keller Williams Realty - Lihue, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

Your post reminds my of a situation last year when an agent claimed a right to a commission because her client had submitted an offer above list price.  I had received 4 offers above list and the one accepted was not hers.  By her logic I would have had to pay a commission to all 4 buyer agents.

Sep 22, 2011 01:54 PM #70
Rainmaker
1,285,018
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

Hmmmmm . . . yeah the wording is valid . . . IF THE SELLER SIGNED THE OFFER SUBMITTED.  If not, what's up with the buyer's agent?!?  D'oh  

Sep 22, 2011 01:54 PM #71
Rainmaker
398,596
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

I am assuming that this agent was somewhat new. Im not a Real Estate Agent and I could have figured out that its not binding until all parties have agreed to it. Perhaps thats just me though.

Sep 22, 2011 02:45 PM #72
Rainer
232,428
Mike Yeo
3:16 team REALTY - Frisco, TX

DOH! DOH! DOH! DOH! If there is not signatures from all parties, it is not a legal binding contract. The last time I check you need 2 parties or more to be in a contract. If only one party signed......too bad so sad!

Sep 22, 2011 03:47 PM #73
Rainmaker
229,218
Susan Jackson
America's Network Realty Group, Inc - Sandy Springs, GA

That is a 'Duh"  I think he needs contracts "101"

Sep 22, 2011 04:33 PM #74
Rainer
11,559
Jay Spencer
U.S. Home & Realty - Grand Rapids, MI

Even my last class of pre-license students would have gotten this right!

Sep 22, 2011 04:54 PM #75
Ambassador
1,285,308
Loreena Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
Realtor® | Frisco TX Community Ambassador

Gosh....I had a good laugh reading your post. Amazing how some people don't know what constitute a legal binding contract.

Sep 22, 2011 11:26 PM #76
Rainer
72,651
Amy Robinson
London Pierce Real Estate - Scottsdale, AZ
Realtor, Scottsdale Arizona Homes For Sale

It is a good thing that you new what you were doing.  Just keep teaching the less knowing.

Sep 22, 2011 11:47 PM #77
Rainer
205,153
Marge Piwowarski
Phoenix AZ Horse Property - Phoenix, AZ
Phoenix AZ Horse Property, LLC

He is a rookie and didn't know any better, he is my age and forgot?  In any case, he was wrong.

Sep 23, 2011 03:00 AM #78
Rainmaker
1,088,871
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

I've had agents do that several times. Crazy people!!! By the way I would also not allow a buyers contract to dictate whether or not the seller can accept a back up contract. That particular clause in our short sale addendum is just plain foolishness. It should not be there to begin with and I doubt very seriously it would hold up in a court of law.

Sep 23, 2011 08:33 AM #79
Rainmaker
280,446
Kasey & John Boles - Jon Gosche Real Estate
Jon Gosche Real Estate, Boise ID - Boise, ID
Boise, Meridian, Ada/Canyon/Gem/Boise Counties

Ooops, yeah, clearly it wasn't an executed contract that the seller had to abide by.  We got a new short sale addendum here in Idaho that looks very similar to that - in our opinion it is a terrible addition.  I don't know where these contract writers are coming up with some of the awful short sale verbiage they do - Kasey

Sep 24, 2011 02:04 AM #80
Rainmaker
996,108
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Nathan... it's almost scary that this agent did not not know something as basic as this.  The word "contract" brings along with it that two persons have reached an agreement... which is then considering binding.  If the two have not yet agreed... no contract exists.  Good Post !

Sep 25, 2011 08:33 PM #81
Rainer
146,742
Coleen DeGroff
eXp Realty - Gainesville, FL
Haile Plantation Real Estate - Gainesville FL
Hi Nate, Congrats on getting multiple offers on your listing! I am sure the seller was thrilled. Sorry to hear you had to deal with a snarly agent in the process. Sounds like this was his first go-round putting together an offer? If that's the case then it's just a leRning curve situAtion and a mistake he won't make again. If that's not the case then that's just scary.
Sep 27, 2011 06:52 AM #82
Rainmaker
263,375
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Would-be buyers cannot compel a seller to do ANYTHING. It's pretty simple. The owner OWNS the property and has all the rights concerning its disposition, including all aspects of any negotiation, until the owner SIGNS a contract giving away some of those rights. If buyers' agents could just understand that simple rule of ownership, so much confusion could be avoided.

Apr 21, 2012 08:43 AM #83
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Rainmaker
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Nathan Tutas

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