An agent has to ask themselves if they want to explain to an adjudicator how their advising a client that they could just "get out of the deal" was not an unauthorized practice of law.
As to your comments about buyers and sellers not going into the same room, that's precisely why they hire agents! No attorneys are going to allow their clients to get together in the same room and settle a matter either. That said, a lot of times the buyer's agent will request permission to present their client's offer directly to the seller with the seller's agent present. The offer can be due to expire on presentation in such situations.
Buyers do not like having to wait to find out of they are possible going to be considered or not. It is not like a seller gives a real quick yes or no. Most times they want to negotiate things to death. Argue over price, conditions, terms, and more. And has anyone ever noticed one simple thing? The realtors do not allow the buyer and seller to go into a room and just hash out details until they either agree or not? The realtors need to pass paper back and forth leaving the real interested parties out of the loop.
To put this in another perspective, this may be a violation of the Realtor Code of Ethics, which in Article 1, states that Realtors must treat all parties honestly. Should I stage a sham inspection so my buyer can use the inspection contingency as a walkaway, so that none would be the wiser? Or simply say, we're going to walk on the inspection. "Why?" Oh, well, we just are. Uh huh.
I can see that story posted on Trulia like six thousand different ways. No thanks.
I guess the issue would be when should you get out of a problematic short sale? I don't have a big problem with continuing to look, or even making another offer on another property (especially one not a short sale). I was addressing it more from the view of having two pending deals at the same time. There I think it really is unfair to the sellers, who are going to have a difficult time selling as it is without a buyer playing them.
With sellers, Dan, there is no risk of the seller selling to two parties simultaneously.
As an agent, I don't want to advise a buyer that in the event that both offers are accepted anywhere near simultaneously, that they can just "get out of one" and move on to another.
It could cost a buyer some money defending the notion that they entered into that transaction in good faith, and that they left the contract by exercising a contingency properly.
The "proper contingency" would be, as noted by Bill, an "I can quit the deal at any time for any reason" clause, which, really, doesn't make it much of a contract, then, does it?
I'm guessing she wants to continue shopping while the first situation resolves itself (or not.)
Nicolette, talk to your agent and/or your agent's broker. Knowing the terms of your first offer currently being negotiated is critical to answering your question in other than general terms.
This is a challenge we all have as listing agents with short sales: the NWMLS Short Sale Addendum allows us to negotiate the circumstance that a buyer may exit at any time prior to bank approval. i.e. at will.
In these cases of Buyers being able to exit at will, I hear too often that they just keep shopping and a lot of time is spent (by the buyer agent - and the buyer for that matter) following up on a deal that's only one of several opporunties and that they can back out of at any time.
It's a lot of work (some would say wasted) for all the parties in the transaction, but it's a product of the times.
" For buyers making two offers on two different properties, there are no such disclosures to the sellers, and that's a huge difference."
I know, this is going more into the psychology of a situation. But isn't that a lot of what determines the end results? Expectations that create results one way or another. If a seller realizes they are in direct competition with another seller for this buyer and his/her money wouldn't they price according to that very real reality they face?
Why is it any different for a buyer to make an offer on different places ( with the proper contingencies in place)? What better way is there for house prices to drop (as they need to) than to have buyers make offers on houses and go with the one who offers the LOWEST price?
Until an offer is accepted it is just a proposal. Why should a buyer not have a chance at being rejected by 2 ( or more) sellers at a time when the sellers think it is fine to do the same thing (reject multiple buyers) in reverse?
Bill said "proceed with caution being certain your agreement allows you to back out for any reason, at any time. " that is the real key. Make sure you have a contingency that allows you to retract your offer. Then once you have gotten your best deal accepted on the house you choose let the other one go.
Kary said "I think it's very unfair to the sellers. " How is that any more unfair to sellers than it is to hold a buyers earnest money deposit when the seller is making decisions to look at other offers? Either way the other party is unhappy. The seller can always put the place back up for sale. But the buyer ALWAYS loses the interest income from their EMD. Plus by keeping that EMD tied up for whatever time frame that may preclude that buyer from being able to buy another property due to lack of resources. The EMD tied it all up.
To any realtors reading this. These are honest questions. When you look at things from both sides why does the buyer have to be the bad guy when it is obvious that both parties are playing the same game. They are simply sitting on opposite sides of the board.
Is it really fair to tell a seller wait for other offers and do not accept this one immediately or to make buyers bid against each other? But you tell a buyer to make an offer on this but only this property, then wait a long time for a reply then when you lose this try another property? I just can not see it.
However, as noted below, the risk is that both offers will be accepted. And as the others note, you can include language in your offer allowing you to get out of the offer. However, that language would weaken the offer substantially, making it far less likely to be accepted by the seller.
Hope that helps.
This is an approach that is not advised, unless you are prepared to purchase two pieces of property.
Some agents may be able to word your offer in a manner that would protect your interest for this type of undertaking BUT.......our advice would be to proceed with caution being certain your agreement allows you to back out for any reason, at any time.