The real estate market is slowly becoming more stable and will undoubtedly become stronger in the coming months. Stronger market activity, the risk of rising interest rates, the eventual loosening of lender requirements and the increasing popularity of FHA loans will likely cause more buyers to enter into the market to take advantage of the lower prices of real estate. As a result, an increasing number of buyers will bring back into focus the obligations of brokers when multiple offers become more prevalent once again and are presented on the same property. NYSAR points out that the rights and obligations of sellers, buyers and brokers are governed by four areas: 1) the REALTOR® Code of Ethics, 2) the Law of Agency, 3) License Law and Regulations and 4) Tort Law (See Broker’s Duty Regarding Multiple Offers, published by NYSAR). The purpose of this article is to outline the obligations of brokers in light of multiple offers.
Obligations under the Realtor® Code of Ethics
Under the Realtor® Code of Ethics the basic rule is that a Listing Agent must submit and present all offers to his or her seller or landlord-client. Unless specifically instructed by the seller (or waived by the seller in writing) not to present more than one offer at a time, every agent has a duty to submit all offers to the homeowner principal (the “principal”) as quickly as possible after receipt of the offer from another Realtor®. However, the listing agent no longer is required to market the property if an offer has been accepted by a seller or landlord client. The Code of Ethics Standards of Practice 1-6 and 1-7 provide as follows:
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