Ethics Q&A

The listing agent thought the offer was too low, so she didn’t present it to the sellers. Can she do that?

Read the full Code of Ethics.

Q What happens if one agent has two buyer clients interested in the same property at the same time? Is it ethical for the agent to present offers on behalf of both clients?

A Your buyer representation agreement should address the issue raised in your question. Paragraph 9 of the TAR Buyer Representation Agreement (TAR Form 1501) places the buyer on notice that the buyer broker may represent other buyers who may be interested in the same properties that the buyer finds suitable. Paragraph 9 also authorizes the broker to procure properties for competing clients and to negotiate the purchase of properties for those competing clients.

If a broker presents competing offers on the same property, the broker should notify the clients of the conflict, remind the clients of the provisions in paragraph 9, and determine if either client has any objection. If an objection is raised, the broker will need to work to resolve the objection. If the objection cannot be satisfied, the representation agreement may need to be terminated.

Q I presented an offer from a buyer client to the listing agent. When the listing agent saw the offering price, she told me she wasn’t going to present the offer to the sellers. She claimed the offer was way too low and would be a waste of everyone’s time. She said that the offer was so low that it would insult the sellers, and she suggested that I tell my buyer she would be happy to present a "serious" offer if they wanted to come up on the price.

After taking a moment to compose myself, I explained that the offer, while certainly lower than full price, was a legitimate offer. I told the listing agent that she should present it to the sellers, and that if it was unacceptable to them, they could reject it or counter.

Who’s right here?

A While the sellers may very well reject the offer, it is their right to do so (or accept it or submit a counter offer)—not the agent’s. By not even presenting the offer to the sellers, it appears that the listing agent has acted beyond the scope of her responsibilities. Standard of Practice 1-6 of the NAR Code of Ethics states: "REALTORS® shall submit offers and counter offers objectively and as quickly as possible."

Even if the sellers have previously rejected an offer with that purchase price or a higher one, the agent should not assume the sellers would also reject the current offer. The sellers’ circumstances may have changed, or aspects of the offer other than the purchase price may outweigh the dollar amount. Also, people sometimes change their minds. By not presenting the offer at all, the listing agent is not protecting and promoting the interests of her client, as is called for in Article 1.

The only scenario where not presenting the offer would be acceptable is if the seller gave the listing agent explicit instructions to not present offers below a certain amount.

Send questions about ethics to texasrealtor@texasrealtors.com. Not all questions received can be answered.

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