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Multiple Offers On Bank REO Revisited

Not a week goes by that I do not engage in a spirited discussion with an agent who expects me or our company to disclose if we have offers on a property.  Combined with the unlicensed public (who are given a pass on this topic because they are not licensed and trained so I would probably ask also) we spend a huge investment of time addressing this issue.

Just a brief bit of background.  In several places on our website for Realtor FAQ (referenced on every MLS/BLC sheet) we suggest agents visit www.BuyWilmothREO.com in order to prepare to show or write an offer on one of our listings.  I would also say that this data base of questions is an excellent education source for any agent wanting to sell foreclosures listed by ANY Realtor.  Specifically..the multiple offer issue is addressed as it relates to the Realtor Code of Ethics and why multiple offers should not be disclosed unless a seller authorizes the disclosure.  For some reason, the standard of practice has denigrated to a level that, in any other type of residential sale, would have the Professional Standards committees busy with hearings.  I would guess that most bank sellers either are not aware of the violation or just have to many other things on their platters to file complaints.   Yet, I have discussed this very topic with many Asset Managers and they all agree.  Information as to how many offers exist should only be revealed in a carefully orchestrated way so as to ensure the end result is a highest and best acceptance.  

The majority of the questions I receive on the existence of offers is so that a Realtor or buyer can avoid this process of the bank orchestrating a highest and best scenario.  That is fine and a small part of me understands.  The small part is the buyer perspective.  Not a clue why a Realtor would not want to make the effort if the property might be a good opportunity for their buyer. 

Yesterday, a slightly different argument was received.  Here is the discussion I had via email with a Realtor after I informed the Realtor that the seller does not authorize our release of information on status of other offers.  

In my 6 years of selling real estate, I’ve never had an agent tell me that they can’t disclose multiple offer situations. It’s in the sellers (in this case, the bank’s) best interest to always disclose multiple offers in order to get the highest and best offer. It’s my experience that in most cases buyers NEVER offer their highest and best, thus the reason for negotiations.

My response:

Just to clarify, I did not say we would not disclose if there are multiple offers.  Different banks handle this a multiple of different ways. In the right situation, they can orchestrate to get the “highest and best” offer.  Unfortunately, with the plethora of foreclosure properties today, and the demand, it is not working in the way you expect.  Just like your buyer, many are using the fact that there are offers to not even look at the home.  Therefore, it is not at all in the sellers interest to disclose until they are ready to ask for highest and best offers.  This is the only way to keep buyers looking (after the first offer is received).
 
The other side fact is I have seen buyers walk away from even looking just because there are offers..when the offers we had were total trash.  Seems to me it is in everybody’s best interest to take a look at the property and decide if you are interested.
We also have a FAQ that describes the common Multiple Offer disclosure scenario  to help an Agent prepare their buyer.   Final note: I think buyers need to be prepared for this process.  If it gives them a bad taste, it may not be appropriate for them to be shown foreclosure properties.   There is a very high percentage in the current market that receive multiple offers before one is accepted.  It may be like looking for a needle in a hay stack to try and find one that is not affected. 

 

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This entry was posted on Tuesday, May 11th, 2010 at 9:28 am and is filed under Buyers, Buyers Agents, Multiple Offers, Offers, Selling Process. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Multiple Offers On Bank REO Revisited”

  1. Tweets that mention Multiple Offers On Bank REO Revisited « The Wilmoth Group Blog -- Topsy.com says:
    May 11, 2010 at 9:59 am

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