What the Seller Wants, Goes
| February 28, 2023
by Doug Dixon, RECA Regulatory Compliance Advisor, Real Estate & Condominium Brokers
In real estate deals, the seller decides how they will evaluate offers, and the seller’s licensee must abide by their client’s instructions.
If a seller has set a date and time for when they will consider offers, the seller’s representative must communicate this to all interested buyers or their representatives. Should the set time change, the seller’s representative has an obligation to make all interested buyers aware of the change.
Licensees representing buyers may ask the seller’s representative to speak with the seller and see if they’ll make an exception to their offer date and timeframe. If the seller wants to wait to review a potential buyer’s offer, unfortunately, there is nothing that can be done by the buyer or their licensee.
If a seller licensee does not abide by the offer date or instructions provided to them by their seller client, it may constitute a breach of the Real Estate Act Rules.
Consider the Pros and Cons
When sellers wait to consider all offers at the same time, it’s usually in a strong seller’s market where there is a higher likelihood of multiple offers. In Alberta, multiple offers situations are still occurring, particularly on properties in desirable locations.
If a seller client is considering waiting until a predetermined date to accept offers, discuss the benefits and drawbacks of using a delayed offer strategy. The biggest risk the seller takes is losing buyers who don’t want to wait to compete in a multiple-offer situation. Great offers could be lost as offers could be withdrawn or not proceeded with at all. After explaining the pros and cons, your client can make an informed decision and give you instructions for handling offers.
In a seller’s market, when a buyer presents an offer that they’d like presented before the seller’s predetermined offer date, this is often referred to as a bully offer. If a seller licensee asks their client to consider an offer early, this could still spark the multiple offer situation the buyer with the bully offer was trying to avoid.
The seller’s licensee may suggest to the seller that they tell other buyers who showed interest in the property that a bully offer has come in. This may lead to other interested buyers immediately putting in their own offers to compete with the bully’s offer.
Best Course of Action
If you and your client are in a situation where sellers are delaying their review of offers, and your buyer is in a rush to purchase, it’s a good idea to advise your client to make sure the first offer is their best one. Have backup properties in mind just in case the offer isn’t accepted or looked at within the buyer’s timeframe.
If you have questions regarding the timeframe an offer is taking to be presented to a seller, please reach out to your broker to ensure you are doing all you can to ensure your client’s offer is presented.
If you believe a seller’s instructions are not being followed, it is best practice within our self-regulated environment to first contact the seller licensee with your concerns about them not following their client’s instructions. If there is no satisfactory resolution, contact your broker to reach out to the seller licensee’s broker. If this doesn’t resolve the situation, you may submit a complaint using RECA’s online complaint form.