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Obviously (hopefully), asking for "highest and best" is not the same as an auction. Auctioneers can auction real estate in Michigan without a real estate license, so they don't have anything to complain about.
It would be a very severe material misrepresentation for a Listing Agent to claim offers in hand that did not exist.
I agree... but the truth is, we don't know. All I'm saying is with calls for "highest and best", we take it on faith there are other offers and GUESS what a good highest offer should be, hopefully without either underbidding by a fraction or overbidding and throwing money away. It has made more than a few clients suspicious and frustrated. A live auction where everyone knows where they stand would be far better (for the buyer) IMHO.
Last edited by Diana Holbrook; 11-06-2017 at 09:41 AM..
Reason: clarity...
I agree... but the truth is, we don't know. All I'm saying is with calls for "highest and best", we take it on faith there are other offers and GUESS what a good highest offer should be, hopefully without either underbidding by a fraction or overbidding and throwing money away. It has made more than a few clients suspicious and frustrated. A live auction where everyone knows where they stand would be far better (for the buyer) IMHO.
I don't think I have been mislead on multiple offer existence for many years.
All I have to do is think of the properties where my buyers don't get the deal, and someone else wraps it up at the same time, and those stories are legion...
Any buyer who wants an auction should go to an auction. It isn't like they don't exist.
It is impossible for a buyer to overbid, unless they over-value. Why would a buyer bid more than what they think a property is worth to them?
Perhaps it depends on the disclosure of other offers.
In NC, we have to have the sellers permission to disclose the existence (and while 99.9% of sellers WOULD want it, there's no signature spot or document for this - hello NCREC Forms Committee!!!)
When we disclose, if asked we must also tell them if any come from our brokerage (dual agency).
Now, I would say that if I ask a listing agent "how many" they better be accurate in whatever they represent to me. I've certainly gotten "at least 5" before, so there better be 5 or more. And we're required to keep a copy of all offers we submit or receive ...so if I decide to call BS on your numbers Mr Shady Agent and call your BIC, you better have those copies.
It IS a problem though .... I know for a fact one associated agent lied to my clients who attended an open house at the existence of "multiple offers and more on the way!" When I called the listing agent, it was "we have one, and other have expressed interest."
One thing we SHOULD certainly hit people over the head with more is the importance of ethics and material facts, especially as concerns this situation.
Colorado seller listing contracts say:"When asked, Broker Will Will Not disclose to prospective buyers and cooperating brokers the existence of offers on the Property and whether the offers were obtained by Broker, a broker within Brokerage Firm or by another broker.
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