Listing Brokerage Must Always Respond to Buyer Offers

//Listing Brokerage Must Always Respond to Buyer Offers

Listing Brokerage Must Always Respond to Buyer Offers

An easy way for Listing Brokerage and Listing Associated Licensees to remember their duty when the buyer submits a written offer…ALWAYS RESPOND.

"Always respond" means one of these three responses:

1. Seller sends a written counteroffer to the buyer side.
or
2. Seller sends a written acceptance to the buyer side.
or
3. Brokerage sends a completed SCR314

https://www.screaltors.org/wp-content/uploads/Forms/314.pdf

By using 1 or 2 or 3, the buyer side knows the seller saw their offer and will likely be satisfied that the seller saw their offer. Oftentimes, the buyer and buyer rep suspect that the listing rep never submitted their offer to the seller for a variety of troublesome reasons and might file complaints or lawsuits to find out the answer.

Note to listing reps, failure to submit offers to the seller could create liability for you and your broker (e.g. lawsuits, ethics complaints, license law complaints).

LLR statute excerpts:

(1) upon receipt, prepare all offers in writing and promptly present them to the seller;

(26) fails to promptly submit all offers and counteroffers in a real estate sales transaction;

The brokerage or authorized agent signs SCR314 and making the seller sign the SCR314 too has a couple benefits…(1) makes buyer side comfortable their offer was seen and (2) protects the listing side from seller changing their story.

The original SCR314 had a pre-printed seller signature line after the LLR SCREC administrator approved the pre-printed line but the LLR SCREC commissioners overrode their administrator’s approval and said "remove the pre-printed seller signature line" because we do not regulate the seller. But, there is no prohibition to you adding the seller signature to the SCR314.

Other related issues:

Multiple offers. When the seller decides to use the SCR312 multiple offer procedure (aka solicit multiple buyers to submit their highest and best offers by a deadline), always send the SCR312 and the SCR314.

https://www.screaltors.org/wp-content/uploads/Forms/312.pdf

Since the law says send the completed SCR314, send the completed SCR314.

Since the law says send the completed SCR314, do not rely on SCR312 or email or verbal or text of fax to replace the completed SCR314. You can send the completed SCR314 electronically (e.g. zipForms digital ink, fax, email attachment, text photo of SCR314).

Although the buyers will know their offer was seen by the seller due to the seller’s request for highest and best in the SCR312 sent to the buyer side, the LLR SCREC has shown a tendency to be literal with the law. So, send the SCR314 to comply with the literal law. SCR312 only complies with the spirit of the law and needs the SCR314 to comply with the literal law too.

Send the SCR312 and the SCR314.

It is also good risk management to send two rounds of SCR314’s in multiple offers: (1) round 1 send the SCR314+SCR312 to all interested buyers and then later (2) send the SCR314 to all the unsuccessful buyers in the multiple offer scenario (the successful buyer got the accepted offer documents so does not need another SCR314).

Bank listed REO properties serviced by giant national foreclosure inventory servicers (e.g. Hubzu, Auction.com, Nationstar) which rely on internet portal offer submissions are a potential issue. Buyers and buyer reps must understand that the banks and their servicers direct how these deals work and with thousands of REO properties nationwide, they rely on technology and the internet portal for offers. Listing reps receiving paper or electronic offers from buyers and buyer reps who refuse to use the internet portal; listing rep should consider putting a stamp on an envelope and having a witness to the paper offer mailing to the REO servicer. While this is a futile effort because the REO servicer only looks at internet portal offers and will not look at the paper offer, the mailer will create a defense if LLR tries to literally interpret the statutes about submitting all offers. The same LLR literal statute interpretation logic applies to also sending a SCR314 to the buyer side.

Note to buyer reps dealing with REO properties, failure to use the internet portal as the REO seller requires could put you at license law and ethics and lawsuit risks. You have legal and ethical duties to look after the best interests of your buyer and to understand the common marketplace procedures. So, ignoring the realities of the REO marketplace by refusing to submit an offer electronically through the internet portal as requested by the REO seller could create many risks for you or not explaining the REO marketplace to your buyer could create many risks for you and your broker (e.g. lawsuits, ethics complaints, license law complaints).

Posted by : Byron King on 9/28/18 (This information is only accurate as of 9/28/18). You must contact SCR for updates and changes to this information after 9/28/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)

By |2018-09-28T09:38:58+00:00September 28th, 2018|Legal FAQs|0 Comments

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