Buyers Beware: I Suggest You Give Up Your Rights

This is a “Multiple Offer Disclosure” that a home buyer received yesterday by way of email.

I’m not completely sure as of this point whether or not some of the information in this disclosure has been approved by the seller or the seller’s attorneys. I suspect not.

It almost just seems to me that the listing agent is making this stuff up as they go along. Especially when they offer “suggestions” on how to make your offer stronger.

Of course, people like myself tend to knee jerk quickly in protection of home buyers so maybe I’m being hypersensitive.

Here is the email…..Then I’ve got a few more words to say about.

DEADLINE: Please have the H&B response by tomorrow 4:00PM!

Hello Agents,

We have received multiple offers on this property; the seller is requesting the HIGHEST and BEST offers be submitted!

1. · Multiple Offer Situations: “Buyer has submitted the highest and best offer of multiple competing offers for this Property. Accordingly, Seller will not negotiate any reduction of sales price if the appraisal does not equal or exceed the sales price. Buyer is responsible for the difference in appraised value and the offer price they submit.”

2. Counter offer acceptance is subject to senior management approval, mortgage insurance and/or investor review.

3. Buyer is AWARE that this is a multiple counter offer situation.

4. Seller must also confirm acceptance.

5. No sale transaction is accepted until seller signs written contracts.

6. Buyer is aware of the Buyer’s Choice Act and allows Seller to continue with Seller’s choice of services in this transaction.

Please speak with your client and let us know if they would like to modify their offer at all; terms or price. We are not necessarily looking for the “highest price”, but the strongest offer; this includes:

1)       Buyers using a “PREFERRED LENDER” to listed on MLS (cross approval)

2)       Buyers willing to remove physical inspection contingency w/i 5 days of Seller’s verbal acceptance of offer

3)       Agents that have sent us proof of funds and pre-approval letters dated within the last 30 days

To respond, simply reply to this e-mail & fill out and return signed Multiple Offer Form attached (if applicable):

New Terms: ____________________

BUYER’S NAME: _________________

PROPERTY ADDRESS: _____________

LENDER’S NAME: ________________

*** Again, DO NOT CALL US & DO NOT ASK QUESTIONS about the other offers, we will not answer those questions & this will only delay the process ***

Simply reply back to this email ASAP with missing items.

Dear Listing Agent, Here’s what I think of your Multiple Counter Offer Disclosure

This is a short sale situation and it sounds to me like the Agent is trying to pad their pockets a bit by taking one last whack at bumping up the sales price (my Agent friends, i’m sure you can set me straight on this if I’m out of line).

The top section clearly states that no sales transaction is accepted until the seller signs written contracts – Then, in the bottom section, the “agent” recommends that the buyer willing to “remove physical inspection contingency within 5 days of seller’s VERBAL acceptance” may be considered a stronger offer?

Hmmmmm….I don’t like it one bit!

Here’s another fun lesson in contradiction for you – Number 6 on the top section of the bill of buyer’s rights states that “Buyer is aware of the Buyer’s Choice Act and allows Seller to continue with Seller’s choice of services in this transaction.”

I’m sorry, I might just be a cynical old real estate guy but it sounds to me like somebody is getting greased along the way. The listing agent is basically just saying “I want to use my friend” and I don’t care about the buyer’s rights. That’s Crap….yes, with a capital “C”

And here’s the doozy – on the bottom section where the sellers agent offers some fun little tips on how to submit a strong offer – They didn’t leave out their buddy, the loan officer either. If you are approved with their “PREFERRED LENDER” your offer is stronger?

Isn’t it good enough that I have received an approval from a reputable lender? Are you serious? And then, just to make sure they got their hooks in you – they ask you to include the LENDER’S NAME: on the return email.

You don’t want the lender’s number or email so you can confirm that the buyer is approved? Oh yeah, that’s right, you don’t care if they are approved, you’re just trying to help out your friends.

Oh boy, this is going to be one of those days. I can feel it already. Its early in the morning and this is like the third thing that kind of pissed me off today while preparing my Homebuyer Education Update email.

Anyhow, we’ve got some lawyers looking at this to see if this sort of thing is on the up and up. I’ll let you know what comes of it.

Tagged as: buyers choice act, congintencies, listing agent, making offers, multiple counter offer, short sales

{ 4 comments… read them below or add one }

1 Bill McCord November 24, 2009 at 12:17 pm: Hi Scott,
This is just one example of a practice that is happening on every deal involving a current Lender either Short Sale or REO in the Silicon Valley and nearby markets. Given that this means 80% of all deals it is causing chaos.
The details vary, but often involve conditions illegal in California. However, if you want the deal you have to sign up.
Another favourite is alluded to in you post. In it’s simplest form it is a Listing agents requirement that ALL offers must include a Pre-Approval letter from a specific Loan Agent.In other cases it’s the REO Lender requiring the same from one of their Loan Agents.
I hope that when all this is over we will see some serious investigation of these and other dubious business practices. Maybe it could extend to Ethics violations by Realtors.
2 Scott Schang November 24, 2009 at 1:43 pm: The “Preferred Lender” on the MLS and referred to in the email does not list a lender name, only a phone number which is picked up by an answering machine with a barely decipherable strong accent….I’m thinking a close relative on this one. Classic.
3 Lus Reyes November 24, 2009 at 9:17 pm: Hi Scott,
I just had the same situation about an agent name (I have removed the name and company of this agent) that was very agresive with every house that I liked,,it was always somebody offered more than the sale price,,so I had to make a stronger offer for tha home,,made me feel like she wanted pad her pockets,,and its no just her,,,,its every realtor that I have come across.I hope that when all this is over we will see some serious investigation of these and other dubious business practices. Maybe it could extend to Ethics violations by Realtors.
4 Scott Schang November 24, 2009 at 10:23 pm: Hi Lus,

Unfortunately, I hear this so often, that’s why every once in a while I just lose my cool and write about it. I removed the agents names and the company names but I still want to get your comments out there to help others.

I thank you so much for sharing your experience, I hope that you inspire others will find the courage to fire their crappy agent too.

There is nothing wrong with an agent trying to make money, that’s why we do what we do – but when they are ONLY doing what they do to make money, that’s when it really shows.

My belief has always been that when you love what you do and you do it well, the money will come

I am out of town until Monday, Jeff Anderson will shoot you an email tomorrow to get more information about where you’re located. We work with many great agents, maybe one is in your area.