How to manage multiple offers in today’s hot seller market.
This stuff always comes up when markets rise quickly and sellers think they can get more money from a future buyer.
- Does a seller have to accept a full-price offer?
- Generally no. But they may owe a selling agent commission under the listing agreement. More to come on this below.
- HOWEVER, some listing agents are adding clauses to their listing agreements that say something similar to “seller shall sign a contract if a full price (or better) offer is received”.
- The problem for realtors is, that sometimes even language like this can be tough to enforce if the seller digs in and refuses to pay.
- Hot markets bring out the best in sellers (just kidding).
- Can a seller accept an offer less than the highest offer, whether above or below the listing price?
- Yes. The general rule is no one can force a seller to execute a contract, even if the offer contains all the requirements stipulated in the listing. A seller’s decision does not have to be based on dollar amount alone. For example, if the lower offer included an earlier closing date, and this was important to the seller.
Is a seller’s agent due a commission if the seller does not sign a full-price offer?
- Generally yes. Most standard Florida listing agreements say the seller shall pay the seller’s agent the commission in the event of a full-price offer.
- Is a buyer’s agent due a commission if the seller does not sign a full-price offer?
- Generally no. This applies even if the seller actually pays the selling agent commission due under the listing agreement.
- However, this should not be confused with the provision of most listing agreements that says, in the event of BUYER DEFAULT, if the seller retains deposits, the seller shall pay the seller’s agent 50% of the deposits retained, and paragraph 15(a) of the FAR/BAR As-IS 2017 that says the seller’s agent shall pay the buyer’s agent 50% of the deposits the seller’s agent actually receives.
- There is no Florida law that requires a buyer or seller to communicate an offer rejection.
- There is no Florida law that requires the seller to negotiate with each buyer in the order the offers were received.
- A counteroffer serves as a rejection of an initial offer. Therefore, the initial offer is no longer on the table.
- Any offer can be revoked until the time it is accepted by the other party (in writing is always best).
- If a seller receives multiple offers on a property, the seller is technically permitted to counter multiple offers simultaneously. However, doing so can create problems. If the seller counters more than one offer, and more than one counter is accepted before the seller is able to communicate the withdraws, the seller could be bound to multiple written contracts and thus have potential liability to multiple buyers.
- The same holds true for buyers. Buyers can make multiple offers, but they stand the risk of being obligated to multiple sellers.