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In our first article on competing offers, we pointed out the process as directed by RECO, the Ontario Regulator. Here we cover some misconceptions and hopefully clarify common issues with the following Q&A.
Is Proof of Presentation Required?
In competing offer situations, some buyers can be disappointed in being told another offer was accepted over their own. A buyer may even become upset over the prospect of losing out. They might question whether their offer was even submitted and presented to the seller. The listing salesperson has an obligation to present all offers. Yet sellers do not have a legal obligation to respond to a buyer’s offer. Though the listing agent will communicate to a buyer representative that the buyer’s offer was not accepted, buyers may question whether their offer was presented. To help remove this doubt it’s good practice for the listing agent to have the seller sign and date an acknowledgment that the offer was presented and declined.
Must Seller Ask Competing Offers to Resubmit?
We have had instances in which a buyer agent, when told their offer was declined, argue that the seller must ask competing offers to resubmit. This can be unfortunate for their buyer. When competing with other offers it’s in the best interest of the buyer to make their best offer. Holding back on the belief that the seller must have everyone resubmit is false. The seller can choose to decline all offers, ask all offers to resubmit, only ask the best offers to resubmit, counter the best offer in the hopes of obtaining more, or simply accept the best offer. There are no rules stating that the seller is required to ask all or any offers to resubmit.
When Does a Sole Offer Become Subject to Competition?
On receiving a single offer, the seller may choose to counter the offer with a higher price and a reasonable irrevocable date for the buyer to respond. The listing becomes open to other offers as follows:
- The buyers do not respond within the irrevocable time and the counter offer becomes null and void, and
- The buyers respond with their own counteroffer to the Seller. Because the buyer did not accept the seller’s counter, the listing again becomes open to competing offers, and this can frustrate the buyer, especially if informed that they are now competing with another offer. This can become especially contentious when it’s disclosed that the competing offer comes directly from the listing agent, even though this is legal.
Can a Seller Change a Written Direction?
Yes. The seller’s written direction might state that seller will not deal with preemptive offers. Yet the seller can change his mind. Now all interested parties must be informed of a moved-up presentation date and time. This approach can cause some buyers to opt out.
