My realtor says when a buyer wants to offer more than 5% below the asking price, she will only make a verbal bid because written is a waste. Ethical?

Asked by Jamy Bond, Stafford, VA Fri Nov 19, 2010

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15
Cindy Jones, Agent, Alexandira, VA
Fri Nov 19, 2010
In Virginia all real estate offers & counter offers need to be in writing to be considered binding. I would suggest you talk to your agent again regarding their reasons for not wanting to present your written offer to the seller.
Web Reference:  http://www.cjrealtygroup.com
1 vote
Lisa Cannata, Agent, Osterville, MA
Fri Nov 19, 2010
All Realtors are ethically bound to present all offers on a property. Verbal offers are not binding and they are a waste of time. 5% below asking does not sound like a bad offer in a buyers market. Go back to you Realtor and insist the offer be in writing and submitted in a timely manner.
1 vote
Mack McCoy, Agent, Seattle, WA
Fri Nov 19, 2010
Are you that buyer, Jamy?
0 votes
Desari Jabbar, Agent, Stone Mountain, GA
Fri Nov 19, 2010
Your realtor is supposed to represent you....and your wishes. Insist that she present a written offer according to your wishes. If she refuses, then it might be time to find another realtor.

Best of luck to you!
Web Reference:  http://www.DesariJabbar.com
0 votes
Rian Muleback, , Portland, OR
Fri Nov 19, 2010
Jamy, simply put that is a red flag to you that you need to find another Realtor. If you simply don't want to walk away then ask the Realtor what their fiduciary duty is to you. Next ask them if they have ever taken a class on ethics and if so, what did they learn in the class? It's the same as you saying you will only verbally bid on a counter that is above a certain price that you like. How would the agent like it if you only wanted to do verbal offers? Their mindset would change dramatically.
0 votes
Jim McCowan, Agent, Arlington, VA
Fri Nov 19, 2010
I think you need to find a realtor who is willing to work for you!
0 votes
Don Tepper, Agent, Burke, VA
Fri Nov 19, 2010
Ethical? Maybe. Smart? No. Watching out for your best interests? No. (Actually, that last no suggests an ethical question.)

Frankly, it's not up to your Realtor to guess whether a written offer 5% or more below the listing price is "a waste." If you want to offer 20% below, that's your business. She can advise you on how to make the offer appealing. She can advise you on what the comps are.

And she can ask that any buyer's broker agreement between you and her be terminated. If she doesn't want to represent you, that's her right. So, from that standpoint, she can say "no."

But she isn't representing your best interests in declining to make a written offer. That's why her best option might be to terminate the relationship. (Ethically, I'm not permitted to interfere with your relationship with your Realtor, so I can't and wouldn't suggest suggest that you terminate the relationship.)

As a practical matter, offers 5% below the listing price often aren't unreasonable. Certainly not "a waste."

As others have already noted correctly, a verbal offer isn't enforceable. It's not worth the paper it's not printed on, to mangle an old saying.

Beyond that, there's more to an offer than just the price. Seller subsidy, closing date, contingencies for financing or a home inspection, type of financing (ranging from all cash to conventional to FHA to VA), and so on. Many listing agents--if they were to receive a verbal offer--would respond: "Please put that in writing and my client will be glad to consider it."

And finally, unless your Realtor is a mind reader, she has no idea whether an offer will be accepted or not and, thus, whether one is "a waste."

Hope that helps.
0 votes
Andy Krumholz, Agent, Reston, VA
Fri Nov 19, 2010
Hi Jamy,

You've gotten a lot of good advice already but let me add one more piece. As a seller, I'll take a written offer a lot more seriously then I will a verbal offer. If the buyer is not taking the time to put the offer in writing, I would think that they're not serious. I would tell your agent you want it in writing.

On counter offers, I sometimes see a verbal negotiation take place (where you put it in writing once you have agreement), but the initial offer should be in writing.

Good luck to you,
Andy
0 votes
Robin Ricker, Agent, Titusville, FL
Fri Nov 19, 2010
There is nothing ethically wrong with a verbal offer, but it is NOT enforceable. I have received verbal offers before, it can be considered a time saver, but I make it perfectly clear, that all of my listings stay as active listings until I have a written signed accepted offer. If I recieve a better offer before their verbal is submitted as written, its their loss.
0 votes
Joe Gillis, Agent, Warrenton, VA
Fri Nov 19, 2010
Hi, Jamy:

My recommendation is to ask your agent to go over the comparable sold and active listings in the community or area where the property is located. That info will give you some idea of whether your proposed offer is in line with market values. If it's not too far off, the seller may be willing to negotiate. Another thought: are you asking for closing cost help? Like you, the seller wants to walk away from the settlement with the most amount of money - the money you save through successful negotiation represents the money you walk away with. If, for example, you want to offer 5% less than the sales price and also want closing cost help, you may find your self in a disadvantageous negotiating position. Convert the percentages to dollar values so you know exactly what you're asking the seller to give up. If you want to make an offer, make it a written offer. If nothing else, it will give the seller something concrete to review. It will be very difficult to convey a complex offer over the phone.

Bottom line: Put your offer in a written contract.

Joe Gillis
RE/MAX Regency
0 votes
James Downing, Agent, Dunedin, FL
Fri Nov 19, 2010
Find a new agent. Ethical or not - nothing verbal is bound and all offers need to be in writing. If the agent doesn't want to do that; than you need better representation.
Web Reference:  http://www.jimknowsdc.com
0 votes
Vicky Chrisn…, Agent, Purcellvile, VA
Fri Nov 19, 2010
Sounds like you need a different agent. While your REALTOR reserves the right to decide what clients she will represent, if she's agreed to represent you then she must be willing to present the offers as directed. If she thinks you're lowballing everything and wasting her time, she can choose not to work with you.

Let's say you came to me and asked me to write a $100K offer on a $1m property. I know it's a waste of time (at least for purposes of this conversation). You and I would have a heart to heart and I'd explain that isn't reasonable, and I'd ask about your motivation.

If you're looking for a needle in a haystack what might be fair is to provide 50% of the expected commission up front in a non refundable retainer. If she does her job, INCLUDING WRITING AND PRESENTING AND NEGOTIATING the offers and they still don't go through, then she's assured she'll at least get part of her fee. At the same time, the remaining fee is left unpaid until she's successful, offering an incentive to successfully find you the needle you're looking for.

Everyone works differenty. But something like that could possibly be an arrangement I would consider.
Web Reference:  http://www.vickychrisner.com
0 votes
Alex Kim, , Stafford, VA
Fri Nov 19, 2010
As 2 other realtor mentioned, all OFFERS and Counter OFFERS has to be in Writting to be enforceable.
It really doesn't matter 5% or even 15% below the price, ALL OFFER HAS TO BE IN WRITITNG.
please go back to that agent and have your Offer in writing and submitted in timely manner.

If that realtor insist not doing it, YOU ARE THE CUSTOMER, look for one that can help your need.
0 votes
Matt Whitman, Agent, Fredericskburg, VA
Fri Nov 19, 2010
Only written agreements are enforceable in real estate transactions. Therefore, a written offer is not a waste. It is the only way to reach an enforceable contract.

It's not unethical to put in a verbal offer, however it does not hold any party accountable to do anything. It is worth the paper it is written on.
0 votes
Jeffery Sklar, Agent, Las Vegas, NV
Fri Nov 19, 2010
The simple answer is No. Offers are not binding unless written. I would find a new agent, quickly...and let her Broker know what she is doing as it is not only unethical but could also place the brokerage at risk of a discrimination claim if she has ever done otherwise.
0 votes
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