In my opinion, it's not the best way to handle things. I tell everyone - if I am the listing agent in that case, I talk with my seller and say "Mr. Seller, we have a second offer - a better one - I think we should notify the first people who put in an offer and ask if they want to make any revisions to their offer, to give them an opportunity to make their highest and best offer. In my opinion, it's the best way for us to negotiate a stronger offer for you, and it has the side effect of feeling at least somewhat fair to the buyer." But, not every agent will do that... and not every seller will agree to it. I have had sellers who said "I don't want to mess around with the first people and lose the great offer we now have." As an agent I must obey the wishes of my seller. It's a contractual obligation.
The word "ethical" is thrown around wildly, but as it pertains to REALTORs, we have a strict ethical code, and it is not intuitive.... and that is why I say it is not unethical - I mean, it does not violate the ethical standards of our profession. That does not mean I think it's right or best.
I am sorry that it happened to you. If you love a property, but your best offer out there - if you play games you could lose the property. Even if you're not playing games, if someone else brings a better offer before you have a fully executed contract, well you could still lose the property.
Doing that, at least in my area, is my legal and ethical obligation.
@ the poster:
"there is a reason the average person instantly distrusts anyone in sales"........that may be true, and you're certainly entitled to your opinion, but this example isn't the reason............the SELLERS, NOT the agent decided to accept the second offer. The sellers had the option to remain with you and your offer. Some sellers I have dealt with, in similar situations, did opt to stand behind their "yes" - they saw it as giving their word and sticking to it.
Many sellers do not see it that way, and instead see it as making a business decision, which is their legal right to do.
Note..... I am saying the SELLERS see it this way or the other way.........NOT the agents..........it is not our job to tell the seller what they SHOULD do......we only inform them of what their options are.
All the agents involved in your transaction did was to do what they were legally obligated to do - present the new offer. The sellers decided to accept it.
What we all understand, and have been trying to get across, is that we get that you are understandably upset, who wouldn't be?...........but the fact is.......... circumstance created your situation, not unethical agents.
My personal response was not intended as an explanation of my personal moral creed and beliefs - I, and others, simply tried to answer the question - sorry if some of the attempts here to clarify what occurred only resulted in upsetting you further.
Best wishes in the future.
When this happens on one of our listings we do give each party the opportunity to bring the firm and final offer.
A handshake in business used to mean something. In every episode of "Pawn Stars" once buyer and seller agree on a sales price both buyer and seller shake HANDS. The process of shaking hands is to show agreement on any sale by human contact or a bonding of aggrement.
How simple the process was before the lawyers screwed it up.
Personally, as the listing agent, I would have done what Vicky suggested - given you, the person in first place, who had a verbal acceptance, the chance to match the second offer, or at least improve your offer with "highest and best" before pulling the rug out from under you.
I think it puts the seller in a better position by doing that as they might get you to increase your offer to keep your deal together......and they still have that 2nd buyer in the wings in case your deal falls through.
By knocking you out and simply taking the new offer - they may have lost you for good, as most buyers in your position would not be very happy with the sellers now...and some would simply walk away and not look back!
But, this isn't a right or wrong situation, even though it feels wrong to you............different agents will handle it in different ways.
Good luck in the future..........something else will come along!
To those who keep pointing out that there is no offer unless it's in writing- I understand that to be the case.
When you state that it is the sellers agent's responsibility to present an offer to the sellers, this is of course true and there is nothing wrong with that. You are implying that the sellers agent did nothing to entice other offers by shopping our our offer around, after obtaining a "yes" to negotiations. This is probably not so true and that's where I have a problem. In fact, this home had no offers for two months. They get two offers in the span of a few hours- coincidental? You decide.
Rationalize it all you want but no amount of rationalizing is going to change the fact that they said "we accept your terms" then dropped the offer to go with a more lucrative dealâ€¦using "we didnt sign so we weren't serious" as a loophole. I'm not sure how anyone can look at that and feel comfortable stating it's ethical- whatever your definition of ethical may be.
FYI- I just sold my home and had the exact same opportunity to potentially entertain another offer. I'll let you guess what I told my realtor.
NMLS # 6395
Financing Kentucky One Home at a Time
In the state of Maryland, offers must be in writing to be enforceable. Therefore, it is legal for the seller to accept another offer since your offer was not signed off by all parties. Keep in mind the offer also needs to be delivered in writing in order for the offer to become a ratified contract. This should be explained to you in a homebuyers consultation with your buyers agent.
This knowledge will help you with the next offer and you will work it out much quicker!Best wishes..
As an individual who was in mortgage sales for nearly a decade, I'll have to disagree with anyone who says its morally OK to alter a handshake from yes to no and stand behind the thin logic of "it's just business". Again, I know I'm not going to convince anyone to change their mind on this with my post but believe me when I say that there is a reason the average person instantly distrusts anyone in sales.
Is there a reason half of the realtors have responded with a contray opinion? Are they wrong and bad businesspeople? I expected to hear that I wouldn't be able to pursue action as there was no contract. What I didn't expect (but should have) was "professionals" defending morally ambiguous behavior. Of course, if it were to happen to them, they'd feel differently...not that they'd admit that either.
FYI, anyone is free to respond to this but youll be talking amonsgt yourselves as I won't be reading the answer. Thanks again to those who did provide useful information.
Once the emotions pass (which is difficult most times), hopefully you can appreciate that getting everything in writing is for everyone's protection. especially when other items are negotiated outside of what the seller was initially offering.
I don't necessarily think the Seller's "yes" was "yes, unless something else better comes along & I can get out of this on a technicality", it was a "yes" based on the information they had at the time. It just happened, to no fault of the seller, that they received a significant amount of new information prior to signing the contract with you that unfortunately turned their yes into a no.
The new offer could have been for exactly what the seller was asking (or even less, but all cash with no contingencies and no risk of it not closing). This may have been what was best for the seller and the seller's family as you said yourself, the home had been on the market for some time.
I'm hearing more and more of multiple offers on homes so it could very well be the market is shifting and you may run into it again. Being able to see the business aspects of your experience will help you make a winning offer next time. You may not like/trust agents, but if you want a home listed by an agent, you'll have to deal with them. Keep in mind, you can have the same issues without any agents involved whatsoever.
Wishing you all the best.
Anywhoo, thank you all for the answers which confirm my thinking.
RE/MAX Realty Group