Multiple Offers and Michigan Real Estate Law

By
Real Estate Agent with Preview Properties, PC - http://www.RealEstateMich.com
http://actvra.in/45hJ

Multiple OffersI’ve had a couple of recent calls inquiring about the correct process for multiple offers.   There’s a lot of confusion on the way that consumers think they should be handled as opposed to what Michigan real estate law says.  Here is what the Michigan Association of Realtors (MAR) has to say about multiple offers.

·         License law requires all offers to be forwarded by a licensee to seller. After the offers are delivered the seller may consider them in any order he or she desires.

·         The buyer's agent is generally prohibited from contacting the seller who is represented by another agent.

·         There is no requirement that a seller must reject an offer in writing or even acknowledge receipt of the offer. A seller can accept, reject or counter an offer. Or the seller can choose to do nothing, or sit and wait for a second offer.

·         A buyer can request that a seller respond in writing but the seller has no legal obligation to do so.

·         There is no requirement on multiple offers that a seller treat each potential buyer equally or fairly (except for the protected categories under the Fair Housing Act which are race, color, religion, sex, handicap, familial status, or national origin).

·         Any material change to a counteroffer is a rejection and becomes a counteroffer back to the other party (true for all offers-not just multiple offer situations).

·         A seller is not required to take the highest offer, but could actually take a lower offer based on terms or cash.

·         The seller can disclose the amount of the offers to none, some or all of the other potential buyers.

·         A seller can offer one buyer an opportunity to submit another bid, without offering the other buyers a similar opportunity.

·         An offer cannot be accepted orally. You do not have a binding contract until the written acceptance is delivered to you (or your agent).

·         An offer or counteroffer can be revoked at any time before it is accepted (even if it contains an expiration date).

·         An offer can be revoked orally.

·         A seller is not required to accept a full price and terms offer.

Most prospective home buyers believe that a response is required by the seller, and that if they get their offer in first that they are ‘first in line’.  Neither is true.  Remember that this is based on Michigan Real Estate Law. Laws in other States may vary. To see MAR's primer on mulitple offers, click this link.

image courtesy of scottchan/freedigitalphotos.net

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Re-Bloggged 6 times:

Re-Blogged By Re-Blogged At
  1. Barbara Hensley 10/10/2013 12:36 PM
  2. Yvette Chisholm 10/11/2013 07:21 AM
  3. Anna Hatridge 10/11/2013 07:43 AM
  4. Sean Williams 10/14/2013 08:37 AM
  5. John Juarez 10/22/2013 12:05 PM
  6. Winston Heverly 01/04/2014 06:44 AM
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Topic:
Real Estate Best Practices
Location:
Michigan
Groups:
Advice for Buyers
The Ninety-ninth Percentile
Agents On Line
Realtors®
Posts to Localism
Tags:
mar
howell homes for sale
brighton homes for sale
multiple offer

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Rainer
162,322
M.C. Dwyer
Santa Cruz Mountains Property Specialist
Century 21 Showcase REALTORs

Great blog Robert!    I hope you get some nice results from it above and beyond our accolades...

October 11, 2013 03:05 PM
Rainer
104,099
Ric Mills
Integrity, Honesty, and Vast Real Estate Knowledge
Keller Williams Southern Az

Great Post and one that we all need to read.  It is the same here in Az.  It is still the seller's house and the seller's decision on how to handle offers.  It upsets some buyers and their agents but they need to know that the seller calls the shots on a response and acceptance or declination.  An upset buyer's agent get's what the seller wants them to have, including nothing.

October 11, 2013 04:08 PM
Rainmaker
697,831
Sharon Parisi
Dallas Homes
Keller Williams Dallas Premier Realty

It's always important to explain to Buyers that the Seller may or may not choose to respond to their offer.  Texas is similar to Michigan when it comes to multiple offers..

October 11, 2013 05:58 PM
Rainer
104,812
Cynthia Streza
Real Estate Professional
Deer Creek Village Realty, LLC

Great post and it came at the perfect time.  In our area, Delta County, Colorado we have not seen many multiple offers, but I think it is coming.  Basically the rules are the same here too.  Thanks for the reminder!

October 12, 2013 08:40 AM
Anonymous #76
Anonymous
Truett Neathery

The seller is your CLIENT, not the buyer! Remember your training class to pass the exam? Look in your Commissioner's Handbook and in Blacks Law Dictionary, or ask your supervisor!

October 12, 2013 10:41 AM
Rainer
154,620
Richard Foster
Broker, ABR/M, CREN, CRS, GRI, RRG, SFR
Nevada Perfect Homes

Here in Nevada, there is a requirement for the seller to respond to all offers. However, the law put no teeth to enforce the law, so effectively they don't. Instead our Division of Real Estate just administratively added the requirement on the licensee. Now the listing agent is responsible to respond if the seller refuses. Hows that for fun?

October 12, 2013 11:24 AM
Rainmaker
203,555
Robert Smith
Search for Homes, Brighton-Howell-SE Michigan
Preview Properties, PC - http://www.RealEstateMich.com

Truett, we know when we are the listing agent that the seller is our client.  There are many instances of agents working for the buyer who aren't sure the listing agent is following the proper protocol (from what I can see in the remarks - been there myself). 

My rule is to be straightforward if I am the listing agent.  Some sort of proof that the offer was presented goes a long way. And guess what?  It's not that hard to do.

 

Richard (#77), the lack of teeth  in the law is problematic.  I had a quandry a couple of years ago.  A broker for a one man shop refused to answer calls or acknowledge an offer that I sent, then dropped off, at this office.  When I finally 'tricked' him by calling from a different phone, he told me that he would not work with anybody from my office because he didn't like *one* agent in my office.  Really!  I wanted so bad to take the offer directly to the seller, but that would have been against both the state law and our Code of Ethics.   What to do? I found the buyers another house.

October 13, 2013 01:05 PM
Rainmaker
36,321
Sheree Holsey
I am Happy to Help You Find your Way Home!
Sold Buy the Sea Realty

Everything in NC has to bee written...no oral agreements when it come to contractual agreements. I think that limits misunderstandings.

October 13, 2013 02:44 PM
Anonymous #80
Anonymous
Truett Neathery Appraiser

Sheree: I don't think ANY state allows verbal - too easy to refute! In CA it's called the Statute of Frauds! An oral contract is not worth the paper it's written on!

 

 

October 13, 2013 04:05 PM
Rainmaker
110,308
Wendy Smith
Real Estate Advisor
Wendy Smith Real Estate

Good post, this is also true of multiple short sale offers.  Also, in short sales, the seller decides which offer to accept, not the bank.  I had this very issue come up this morning where a buyers agent insisted I must present all offers to the bank though the seller has already ratified a different offer.

October 14, 2013 08:13 AM
Anonymous #82
Anonymous
Truett Neathery Appraiser

Wendy: What if it's OK with the selled and not OK with the noteholder?

BTW, what is a "RE Advisor? An advisor does not usually collect a commission based on the closing price, but gives advise on a fee basis. Aren't you actually a commissend salesperson?

 

October 14, 2013 08:27 AM
Rainmaker
113,155
Sean Williams
Your Louisville Realtor
AcklesWilliams of Semonin Realtors

Robert - I love this blog, it clearly outlines and defines the ways an offer/multiple offers can be handled by the buyer & seller. I think this info is really well written and I will be sharing with my community by re-posting. Thanks!

October 14, 2013 08:35 AM
Rainmaker
826,414
Tim Lorenz
949 874-2247
TIM LORENZ - Elite Home Sales Team

Well done and a good explanation of the process of multiple offers.

October 14, 2013 08:41 AM
Ambassador
1,259,291
Silvia Dukes PA, REALTOR
Florida Waterfront and Country Club Living
Tropic Shores Realty - Ich spreche Deutsch!

Robert, great post and spot on.  There are many misconception among buyers and sellers - even agents - about how to handle multiple offers.

October 14, 2013 03:20 PM
Rainmaker
203,555
Robert Smith
Search for Homes, Brighton-Howell-SE Michigan
Preview Properties, PC - http://www.RealEstateMich.com

I find that there are a lot of confused agents, period.  It doesn't help that in addition to private (traditional, or retail) sellers, that each bank can pretty much dictate their own rules into the mix.

October 15, 2013 04:36 AM
Rainmaker
628,767
Stephanie/Bob The Ruiz/Miller Team
The Ocala Dream Team
Keller Williams Cornerstone Realty
Hi Robert, excellent post. So many agents think they must get a highest and best and that is not true.
October 15, 2013 09:38 AM
Rainmaker
331,438
John Juarez
CDPE, ePRO, SRES, GRI, PMN
Prudential California Realty

Robert,

One more vote for the excellence of our post and the information that it contains. We have been experiencing multiple offers for many months in the SF Bay Area. Knowing how to handle is very important. The points elucidated (a word I don’t get to use very often) in your post are similar to expectations and responsibilities in the handling of multiple offers in California.

In fact, this merits re-blogging!

 

October 22, 2013 11:27 AM
Rainmaker
303,887
Inna Ivchenko
Los Angeles / Valley Homes
Mannis Real Estate Group

I would appreciate if the sellers were required, at least, to acknowledge the offer. This year almost all properties had multiple offers, due law inventory and panic among buyers that they 'might miss the bottom'. 

November 07, 2013 12:30 AM
Rainmaker
203,555
Robert Smith
Search for Homes, Brighton-Howell-SE Michigan
Preview Properties, PC - http://www.RealEstateMich.com

At the very leaset, I would hope listing agents notified other agents that they're out of the mix.  Having been on both sides of this one, I can say that it sometimes is more trouble than it's worth when a buyer's agent gets rude or accuses you of improper motivations.  No easy answer.

November 07, 2013 07:03 AM
Rainmaker
261,430
Wayne B. Pruner
Tigard Oregon Homes for Sale, Realtor, GRI
Oregon First

This is spot on. Handling multiple offers for a Seller really toughens you up.

November 09, 2013 07:45 AM
Anonymous
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Rainmaker
203,555

Robert Smith

Search for Homes, Brighton-Howell-SE Michigan
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