Standard of Practice 1-6

REALTORS® shall submit offers and counter-offers objectively and as quickly as possible(Adopted 1/93, Amended 1/95)NAR Code of Ethics, Standard of Practice 1-6

Offers to be Presented Objectively

Standard of Practice 1-6 mandates that brokers submit offers objectively. Webster’s dictionary defines the word objectively as “based on facts rather than feelings or opinions : not influenced by feelings.” Opinions, favoritism and speculation should be avoided, and the facts should prevail.

Amongst the opinions a broker should keep to themselves, is the opinions they may have about other brokers or brokerages that are not rooted in fact. Article 15 of the Code of Ethics dictates that “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” The key words here are false and misleading.

In other cases, sellers may be tempted to ask their brokers questions such as “which offer is the best offer,” which offer should we accept,” etc., and subsequently may only want to see that offer. When this happens, a broker should remember their responsibility to present all offers,ensure that their seller clients acknowledge all offers, even those that at first glance may not be “in the running,” and work to help the seller understand the actual difference between the different offers, whether based on price or other terms, before offering their opinion.

One very effective way to present offers objectively is to utilize net-out statements. Comparing the net out amounts on competing offers is factual and objective. Net out calculators are available from title companies around the state, a broker’s competence utilizing them is imperative.

Another approach that some sellers may appreciate is the utilization of a side-by-side comparison worksheet that includes other terms in addition to the net-out amount. A worksheet that can be used to help sellers compare multiple offers is attached (see attachment).

Offers to be Presented as Quickly as Possible

Standard of practice 1-6 also mandates that brokers must submit offers as quickly as possible, meaning without delay. Waiting to present offers while waiting other offers to appear (stalling), delaying forwarding offers received via email, or any other deceptive practices when it comes to making the seller aware of any offers received is prohibited.

Remember as well, according to NMREC Broker Duties, brokers have this duty in

(2) Timely presentation of offers or counter-offers and responses thereto, unless otherwise agreed to in writing by the party to whom the broker is directly providing real estate services; NMREC Rules

So there are requirements from the Code of Ethics that the broker must submit offers to the seller quickly and objectively, and the Broker Duties in a timely fashion, but there is no requirement that the seller respond by the deadline or at all. This is because the owners are not subject to either the NAR Code of Ethics or NMREC Broker Duties.

Seller’s Response to Offers

There is no requirement for the seller to respond in the Code or the Broker Duties, but Language pertaining to this has been added to the New Mexico Association of Realtors Residential Listing Agreement in the paragraph entitled “Seller Obligations:” seller to respond to all offers presented. This language allows the listing broker to set an expectation that the seller will, at least at some point before or after the expiration date, respond. Usually this is done on an offer to offer basis, but there are other alternative strategies that some brokers are currently using.

Here’s one strategy that is being used. A broker puts the house active on the MLS for a predetermined number of days that includes a deadline for offers to be received. The listing broker notifies cooperating brokers of the deadlines in the listing office to selling office remarks (LO/SO), or broker remarks section for all brokers to see.

When this strategy is used, sellers are given more time to gather offers, which at first glance might seem unfair, but buyers are given more time to think about making offers as well, taking some of the pressure off of them too. As long as good communication practices are employed, this strategy treats both parties honestly and fairly and is not unethical.

Related article: Speak Up When Offer Arrives