LEGAL UPDATE Elizabeth A. (Betsy) Urbance | Illinois REALTORS® Director of Legal Services; Associate, Sorling Northrup Attorneys
TEST YOUR KNOWLEDGE ABOUT MULTIPLE OFFERS We would like to introduce our membership to a new feature presented by the Illinois REALTORS®’ Legal Team, which is a series of short videos titled, “Legal Minutes.” The first two videos cover multiple offer situations, “Multiple Offer Situations as a Seller Agent,” and “Multiple Offer Situations as a Buyer Agent.” Take this quiz and see how much you know and compare your answers to those in the videos:
1
Must a listing broker always disclose that there are multiple offers to the buyer?
A: While this is preferable, the listing broker must disclose only if the seller authorizes the disclosure.
2
True or false: the listing broker is automatically permitted to stop presenting offers, once the seller has an accepted contract in place? A: False. Offers must be presented up until the time of closing
unless the seller waives this requirement for the listing broker.
3
The listing agent has been directed by the seller client to ask for highest and best offers from multiple buyers.What is the effect of this request on those offers? A: The legal effect of asking for “highest and best” from all offerors is a rejection of all offers.
4
True or false: the Illinois Real Estate License Act and the REALTOR® Code of Ethics govern the behavior of unlicensed sellers and buyers.
Find the “Legal Minutes” videos at www.IllinoisRealtors.org/legal/webinars
6
What is a possible legal effect of a seller countering two offers at the same time?
7
If a seller suggests countering two offers at the same time, what should the listing agent do?
A: The possible legal effect of two offers being accepted at the same time, is that the seller has sold his one property twice. This is a legally uncomfortable position in which to be.
A: The listing agent should — and indeed has an ethical obligation to — refer the seller client to their legal counsel.
8
What practice might a listing agent use to prove to the buyers in a multiple offer situation that the listing agent has presented all offers to the seller client? A: If at all possible, the listing agent should encourage the
A: False.
seller to sign some written acknowledgement of the seller’s action, i.e. rejection of the offer.
5
9
True or false: an escalation clause is a foolproof method for buyers to “win” in a multiple offer situation.
A: False. These types of offers are rife with potential problems. For more on this subject go here www.bit.ly/LegalJuly2016
14 www.IllinoisRealtors.org
True or false: the seller must always accept the highest offer.
A: False. The seller is generally free to accept the offer he likes best, absent nefarious reasons such as in order to discriminate based on a buyer’s membership in a protected class.