I've showed a couple of short sale properties that have sellers instructions attached to the listings.  I view this practice as intrusive and think it may open the seller to demands for lost commissions (at least in California).  In addition as a buyers broker I felt required to disclose the restrictions placed on me and by agency on my buyers.  I feel these seller requirements were at least in part of the reason why they moved on to other properties.

This isn’t something that an unknowing seller that doesn’t understand the separation of agency dreamed up, but seems to be a form included in the agents listing presentation (as I've seen it on 2 different listings with different sellers, but same agent).

 

Sellers instruction,

 

To listing agent

From seller

Date

RE property address

 

Dear (Listing agent)

 

I authorize and direct you to ask buyers agents who send you an offer on my property identified above to promise in writing that they will not write any more offers for their buyer(s) upon my acceptance and to withdraw any outstanding offers upon my acceptance.

 

I want to know whether the buyer’s agent makes this promise to you before I sign any offer.

 

Please ask agents to return the following verbiage to you:

 

I, (name of agent) as a member of the board of realtors, promise that upon seller’s acceptance of my buyers’ offer (buyers name) for (property address), I will not write any more offers for those buyers.  If the buyers have any outstanding offers, I will immediately withdraw those offers upon seller’s acceptance, because my buyer will wait for short sale approval per the terms in the SSA.

 

Signed and dated by the seller

Also attached

Bank of America disclosure to be signed by both licensees  -  [marketing efforts were in fact and “in spirit” aimed toward maximizing the selling price of Property from a ready, willing and able buyer.  Licensee has not engaged in any conduct that restricts or limits offers from buyers, including but not limited to requiring cash offers, using disparaging language regarding the property or tenants, or unreasonably restricting access.]

 

 

 

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Gary, Sellers can put any restrictions on a property they want.  Sorry.  My gut reaction to reading this is the sellers have been burned by some buyers that likely put in an offer on the property and then the buyer withdrew to move onto better pastures.  It can be extremely frustrating for sellers to not have a buyer committed to the sale.

My sellers also have disclosures attached to listings that advise the buyers how they should construct their offers.  There is no reason the sellers should waste their time on unqualified buyers, or buyers not committed to hang in their for at LEAST three months. Our listing disclosures weed people out on purpose.  We want the strongest buyer committed to the sale. 

"Sellers can put any restrictions on a property they want. "

Of course you are correct in stating that sellers can put any conditions/restrictions on their property they want.  However we (agents/brokers) have an affirmative duty to guide them to away from violation of laws that they may encounter, for example failing to disclose property or improvement faults, restricting buyers based on  protected classes.  And the seller made me do it won’t be much of a defense. 

 

Article 16 of the Realtors® Code Of Ethics  -  REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Sorry Gary, you lost me on that one!  What part of your issue violates Article 16?  

I’m sort of new here (been a lurker), am I stepping on toes, is this a form that is in some way provided or recommended by this site?

Well Jeff I’m going to assume because you live in FL that you are a FL licensee. The clause in the form. 

“I authorize and direct you to ask buyers agents who send you an offer on my property identified above to promise in writing that they will not write any more offers for their buyer(s) upon my acceptance and to withdraw any outstanding offers upon my acceptance.”

This contradicts requirements of Florida’s Single Agents duties  4 and 8 and muddles with 2 and 7 (see below).  If my Buyer asks me to write and offer on another property I have an obligation under 4 to do so.   Of course under item 8 I have an obligation to present all offers in a timely manner.

This form interferes with the Single Agency (buyer’s broker)  contract between myself and my client.  That is what I view as the article 16 violation.  This is just my opinion at this point, I haven’t pressed the matter with the local realtor board.  I’d rather just see if it can be resolved amicably.

 

FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS SINGLE AGENTS DISCLOSE TO BUYERS AND SELLERS THEIR DUTIES.

As a single agent, (insert name of Real Estate Entity and its Associates) owe to you the following duties:

1. Dealing honestly and fairly;

2. Loyalty;

3. Confidentiality;

4. Obedience;

5. Full disclosure;

6. Accounting for all funds;

7. Skill, care, and diligence in the transaction;

8. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing; and

9. Disclosing all known facts that materially affect the value of residential real property and are not readily observable.

 

The same obligations for both buyers and sellers brokers

Gary, in Florida we are presumed Transaction Brokers unless we transition to a single agent so what you copied and pasted really may not even apply in this case. 

I don't use the form that you presented, never have but what I can tell you is that if you were practicing in Florida, you would most likely have to have your buyer deposit their EMD and make it non refundable for at least 90 days and your buyers due diligence would start upon sellers acceptance of the contract.  That has the same effect as the directions from the seller in your case.

I would guess that the agent that is requesting this is not well versed in short sales but understand enough that they are trying to protect their sellers from the buyer upon advice from their agent that places multiple offers on properties and only has intentions of purchasing one property.

Perhaps the seller could change it to add in the contract that the buyer MUST notify the seller in writing of their intention to make other offers and that the seller has the right to cancel the contract immediately or the right to make the EMD non refundable unless short sale is not approved?

OH, BTW, you didn't step on any toes, you just got responses that do not agree with yours and that's OK.

Gary, in Florida we are presumed Transaction Brokers unless we transition to a single agent so what you copied and pasted really may not even apply in this case.

True, many states don't offer Transaction Brokerage but I’m also a licensed broker in OK which is a Transaction Broker state, but I chose not to practice that way. I want a client I can work for.

I don't use the form that you presented, never have but what I can tell you is that if you were practicing in Florida, you would most likely have to have your buyer deposit their EMD and make it non refundable for at least 90 days and your buyers due diligence would start upon sellers acceptance of the contract. That has the same effect as the directions from the seller in your case.

Here we agree, it is the form I’m objecting to. And if I was in Florida, while I wouldn’t write the offer with a 90 day non-refundable EMD, I would promptly present your counteroffer to my buyers for their consideration, and would probably explain that this isn’t an uncommon practice locally (if true).

Perhaps the seller could change it to add in the contract that the buyer MUST notify the seller in writing of their intention to make other offers and that the seller has the right to cancel the contract immediately or the right to make the EMD non refundable unless short sale is not approved?

Therein lies the crux of my problem with this form. It’s not the buyer’s broker that should have their feet held to the fire but the buyers. Put the conditions in the counteroffer and let the buyer(s) decide. The listing agents walk a fine line with protecting their client (assuming that the broker isn’t a transactional broker) and complying with the lender’s licensee certifications. Remove the form and the restrictions prior the the sellers consideration of the offer and put it in the counteroffer and it's problem solved for me, and it seems for the listing agents too by removing restrictions that could keep buyers from making offers that conflict with the licensee certifications.

OH, BTW, you didn't step on any toes, you just got responses that do not agree with yours and that's OK.

It is OK, I understood from my limited lurking that the site is designed for and targeted at the listing and closing of short sale properties. I understood this when I started the discussion here. I could have posted in a buyer’s broker forum but all I would have gotten in response would have been agreement and what I was looking for was what I may have overlooked in my thinking on this form, and this seemed to be the right place for that.

Thanx for your time, consideration and information. Have a great weekend

Gary. IF you are working as a single agent for the buyer then you obligation is to explain to him what the sellers requirements are. Then the buyer can make the decision whether or not to pursue the property. By doing this you have fulfilled your agency obligation.

The seller and his "agent" whether a single agent or a transaction broker HAS zero obligation to you and your buyer except to deal honestly. They fulfilled this by telling you and the buyer what terms and conditions they are looking for. 

This has nothing to do with excluding a protected class.

"Gary. IF you are working as a single agent for the buyer then you obligation is to explain to him what the sellers requirements are. Then the buyer can make the decision whether or not to pursue the property. By doing this you have fulfilled your agency obligation."

 

Yes, but in the case of the form in question the seller’s requirements didn’t affect the buyer just the buyer’s agent.

 

"The seller and his "agent" whether a single agent or a transaction broker HAS zero obligation to you and your buyer except to deal honestly. They fulfilled this by telling you and the buyer what terms and conditions they are looking for.

This has nothing to do with excluding a protected class."

 

I sort of agree with you, I view a transaction broker as having equal duties to both the buyer and seller.  The protected class was simply responding to Smitty’s statement “Sellers can put any restrictions on a property they want.” That while true, should the seller put restrictions that are illegal we as brokers may not be able to take the listing.  Protected classes was simply an example.

 

As this discussion has evolved I’ve come to wonder if it is prudent to put any seller conditions or restrictions on the MLS listing at all?  Seems to me any of those restrictions or conditions could be used to deny the commission by a bank desperate for some good PR. 

Gary, what did you encounter that was illegal?  I read your the info on the MLS you posted.  I'm not seeing what is illegal.

Bryant,

You absolutely nailed it!

Gary,

The only thing I’d add would be that "Seller’s Instructions" are like "Listing Price" only a SUGGESTION! Write your offer in your client’s best interest, the seller can either accept, counter or reject it.

I would suggest you comply with the: "Bank of America disclosure to be signed by both licensees" it’s nasty, but without it there will be no short sale with B of A.

Bill

Gary, I know about tort, but what here is tort?  What here is illegal?  Nothing you wrote about in your intro to this thread is illegal.  Again a seller can put any conditions they want on the sale, and nothing that you wrote I see is illegal.  What here are you saying is illegal?

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