Disclosure Of Multiple Offers
QUESTION: I am a listing agent on a property where there has been a lot of buyer interest. Earlier today, I received offers from two different buyers. The buyers are represented by two different agents. Neither agent is aware that this is a multiple offer situation, and neither one has asked me if there are any other offers. I know that some sellers are reluctant to disclose the existence of multiple offers to competing buyers because they are afraid that the buyers will withdraw their offers rather than compete. In the absence of an inquiry from the buyers or their agents, do I have any legal or ethical obligation to disclose the existence of multiple offers?
ANSWER: The short answer is no.
Standard of Practice 1-15 in the REALTOR Code of Ethics provides guidance as to a REALTOR’s ethical obligations. That provision imposes a disclosure obligation on a listing agent, but only if: (a) the REALTOR first obtains the seller’s approval, and (b) there is an inquiry from a buyer or a cooperating broker. Since no inquiry has been made in your situation, you have no ethical obligation to disclose. You should note that where an inquiry is made and disclosure has been authorized by the seller, Standard of Practice 1-15 requires REALTORS to disclose whether the offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. You should consult with your seller to discuss whether it is in the seller’s best interest in this situation to disclose the existence of the multiple offers. If the seller thinks disclosure would be a good idea, there’s certainly nothing that would prohibit you from disclosing the existence of the multiple offers to the agents for the competing buyers, even though the agents haven’t asked if there are any other offers.
There is nothing in North Carolina’s licensing law that requires a listing agent to volunteer information about other offers. The North Carolina Real Estate Commission does require agents to treat all prospective buyers equally in the multiple offer context. This means that if the listing agent does disclose the existence of multiple offers to one competing buyer, the agent must also disclose that fact to all other competing buyers.
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