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There's some intriguing scuttle going around that professional auctioneers are starting to take a hard look at the real estate industry's use of "highest and best" offers and are suggest that it might be against the Realtor's code of ethics for an agent to hold themselves out as an "auction" expert in these scenarios. Professional auctioneers have to undergo training and certification, which I would suspect is not something that the vast majority of Realtors have done. The suggestion is that the process of "highest and best" closely resembles an auction, and may not necessarily be conducted within standards established by the National Auctioneers Association.
Thoughts? Are agents acting as auctioneers in cases such as these?
LOL
Everyone wants exclusivity to line their pockets. Whether earned or not, many don't mind manufacturing it.
No, it is not an auction.
And, the COE compels the listing REALTOR® , with the clients' permission, to inform other agents if there are multiple offers.
I wonder who would next consider a multiple offer situation as "similar to an auction," hoping to get a slice of that pie...
Usually in an auction, you can see and know what the other bids are.
I wish it WAS more like an auction in multiple offer situations, so you could know what you're up against... and you know what you lost to also, without waiting til it closes.
"OK folks, we have a 320K conventional at 60 days... can anyone top that?" would be better and seem less like trickery to nervous clients than bidding up in the blind, not even knowing for sure if they are or are not already the high bidder or whether the other bidders even exist.
As an outsider, it seems to me not to be an auction. Not even a silent auction. The reason being, that the seller makes a decision of which contract to accept based on a number of non-equal factors including price and all of the various conditions. The conditions which best fit the seller's needs will vary from seller to seller.
No. It isn't an auction and agents don't hold themselves out as auction experts. We are allowed to negotiate real estate transactions per state laws and have contracts created by attorneys to do just that. It's a totally different process.
What's the basis for the claim that this is against the Realtor code of ethics? What specifically in the code do they say it violates?
Does 'best and highest' have a formal meaning in the context of taking offers? I know it has a legal and formal meaning in property use as related to appraisals but not in the context of offers. Seems like it might be a very loose term.
Related to offers (real estate and other business), the term 'best and final offer' (BAFO) is what I've seen more regularly. I raise this because I believe this may have a more formal meaning, especially in terms of the 'final' part of it. It suggests a more specific process (i.e. taking one more bid from competing buyers or sellers and no further negotiations). 'Highest and best' if it does lack a formal meaning is pretty watered down so I don't really see how it suggests something formal like an auction. BAFO would seem to suggest a process that would be closer to an auction but that even seems like a stretch.
What's the basis for the claim that this is against the Realtor code of ethics? What specifically in the code do they say it violates?
Does 'best and highest' have a formal meaning in the context of taking offers? I know it has a legal and formal meaning in property use as related to appraisals but not in the context of offers. Seems like it might be a very loose term.
Related to offers (real estate and other business), the term 'best and final offer' (BAFO) is what I've seen more regularly. I raise this because I believe this may have a more formal meaning, especially in terms of the 'final' part of it. It suggests a more specific process (i.e. taking one more bid from competing buyers or sellers and no further negotiations). 'Highest and best' if it does lack a formal meaning is pretty watered down so I don't really see how it suggests something formal like an auction. BAFO would seem to suggest a process that would be closer to an auction but that even seems like a stretch.
in an auction, exactly 1 part of the exchange of goods is up for bid - price.
As others have said, real estate sales have several moving parts which can differ in very important ways to the Seller; in my experience the top 4 after price (and in odd cases, on an even playing field with price) are:
1. cash or financing
2. % of financing
3. closing date/occupancy
4. items to convey
Perhaps the auctioneers would have an easier time going after the Fantasy Football leagues that have auction drafts and auction waivers.
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