Disclosure of Other Offers. Do I or Don’t I?

In the category of no-win situations licensees who answer yes or no to the question “Do you have other offers?” is going to look bad to someone who cares about the answer. The REALTOR Code of Ethics, and the State of Wisconsin laws regarding disclosure read separately have something for everybody to point to when they want to accuse a licensee of failing them or failing to meet their expectations. Fortunately, the response which keeps the licensee on the right side of the law can be determined if the people involved in the conversation are willing to follow a path of logical thinking.

The Code of Ethics sets standards and parameters for ethical fair-play. Ethics are inherently subjective to norms. Your standard of ethics may be higher than those in the Code, and you are welcome to practice your standard. Holding others to your superior standard will result in your expectations being unmet time and again. All REALTORS are subject to the Code of Ethics, but all REALTORS do no practice is every state. State law dictates legal practice standards. Legal standards when greater than an Association Ethical Standard take precedence.

When the question is disclosure of other offers or possible other offers the Rule and the Code are going to send you on a tail chasing circle. NAR Standard of Practice 1-15: IN response to inquiries…(REALTORS) shall, WITH THE SELLERS’ APPROVAL, disclose the existence of offers on the property. OK. When the seller approves disclosing the existence of offers a REALTOR MUST disclose. Question: “Do you have any offers on the property?” With the sellers’ approval you must answer YES if indeed you do have offers. Does the listing contract give you automatic approval to disclose you have other offers? No. How will you know if you do or do not have approval from seller? Do you assume you do or you don’t have permission? Murky.

What does the law say? REEB 24.12 speaks to confidentiality. “…a licensee may, but is not required to, disclose information known by the licensee regarding the existence of other offers on the property…”. Where are we now? Do we disclose or don’t we? Depends.

Do we have an ethical and or legal responsibility to give honest answers, provide accurate information, avoid misrepresentation? Yes, and yes. But…if the client gives us a lawful instruction to keep existence of offers or the fact that no offers are in or coming in confidential, we are to keep the facts confidential. Does that mean we can lie? No. When our answer the accurate representation of a fact related to presence of offers is YES or NO and the answer is contrary to the lawful direction of the client, the only answer is: “It’s confidential”. Does “it’s confidential” remove you from an accusation of ill intentions? Nope. Someone is not going to like the answer.

So what do we learn? The best defense against an accusation is, DON’T participate. The best defense against being found guilty is documentation. Amendments and Notices are proper forms for documenting lawful instructions. An email or a text will help. Your recollection of a phone call, or your opinion of what is standard practice, or best for your reputation are insufficient and possibly just wrong. Depend on the literal interpretation of the law, and the Code. And then make sure the client’s direction is in writing, and lawful.

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