Irate sellers believe business negotiations should be private between agent and client
After a doorstep confrontation, we called our agent’s supervising sales manager.
Question: Selling our Bay Area home keeps getting interesting. We accepted a homebuyer’s offer on Tuesday. It was the most substantial offer among many. By Thursday, a buyer’s agent who also submitted an offer knocked on our door. In her company were her homebuying clients. We rejected their purchase offer with several others. They wanted to know why. Since Tuesday, our seller’s agent has shared our home’s sale price with local agents. The buyers and their agent on our doorstep were upset we accepted a lower offer.
My husband was furious. After the doorstep confrontation, we called our agent’s supervising sales manager. This realty agency sales manager was unapologetic. The sales manager stated it is common to share pending sale prices, explaining that proclaiming the process helps active homebuyers and their agents write better offers. That is not our concern. Our business negotiations should stay private, especially during the four weeks of the escrow closing process.
If the home sale falls apart, our exposed negotiations with the realty community will be detrimental. The seller’s agent we hired must strengthen our position in the marketplace, not weaken it.
How can this practice of divulging a seller’s pending sale price be acceptable? And to whom? We know it to be unethical. But is it legal?
Answer: Real estate attorneys will refer us to the contract you signed with your seller’s agent. In the California Association of Realtors (C.A.R.) Residential Listing Agreement (Exclusive Authorization and Right to Sell) (C.A.R. Form RLS) stated in paragraph 10. Broker’s and Seller’s Duties: A. Broker Responsibility, Authority and Limitations:
• “Broker agrees to exercise reasonable effort and due diligence to achieve the purposes of this Agreement. Unless the Seller gives the Broker written instructions to the contrary, Broker is authorized, but not required, to:
• (iii) Disclose to any real estate licensee making an inquiry the receipt of any offers on the Property and the offering price of such offers.”
Silicon Valley home sellers on the San Francisco Peninsula and in western Santa Clara County often use the PRDS Exclusive Authorization and Right to Sell listing agreement. The section of your interest is at the beginning of the PRDS Form EXA.
• Marketing; Dissemination of Sale/Listing Information:
• d) “Broker is authorized (in accordance with applicable MLS rules and regulations) to report the sale, all status changes (including, but not limited to, cancellation, withdrawal and expiration) and, upon close of escrow, sale price, terms and financing for the publication, dissemination and use by, and information of, MLS participants/subscribers.”
Critical verbiage regarding agent disclosure in the PRDS Form EXA is “and, upon close of escrow, sale price.” Conversely, the statewide C.A.R. Form RLS states, “Broker is authorized, but not required, to: (iii) Disclose … the offering price of such offers.”
Disclosing a pending sales price with parties outside any ongoing business negotiation is counterproductive. Full stop. Your agent was empowered to share your pending sales price depending on the Silicon Valley or statewide form employed. Regardless, it was power misused.
For Housing Market Data in your area, visit my webpage for trends here. Do you have questions about home buying or selling? Full-service Realtor Pat Kapowich is a Certified Trust and Probate Specialist, Certified Real Estate Brokerage Manager and career-long consumer protection advocate. He is based in his hometown of Sunnyvale, California. Office: 408-245-7700; Broker# 00979413 Pat@SiliconValleyBroker.com