Ask Our Broker With Peter G. Miller: Private Offer?
Question: We live in an area where real estate sales are hot and multiple offers are common. If we make an offer on a property and several offers come in, do other bidders or agents get to see our offer?
Answer: According to Realtor Mag, a publication of the National Association of Realtors, “terms of offers can be disclosed to competing buyers or their agents by sellers or seller’s representatives unless there are laws or confidentiality agreements that specifically prohibit that disclosure.”
It is possible, says the publication, “that sellers or sellers’ representatives may not treat the existence, terms or conditions of offers as confidential unless confidentiality is required by law, regulation or by any confidentiality agreement between the parties.”
This has been a long-time matter of dispute because you wouldn’t expect your doctor, attorney or cleric to disclose confidential information so why should an offer to purchase a home be treated differently? An offer may reflect your financial capacity (buying for cash or with 3 percent down?) a private matter (gee, the offer is from him, I wonder if they’re getting divorced?) or a business matter (if the Smiths are bidding for a smaller house maybe that rumor about the plant closing is right).
The most basic issue is this: If sellers and their representatives can disclose your information, they essentially have the right to “shop” your offer, to say to another buyer, “Hey, give me an extra $2,000 and the place is yours.”
Is there anything positive about a right to disclose a buyer’s offer?
Yes. Let’s imagine you’re looking at a home and you’re told an offer has already come in. Would you like to make an offer too? You have no physical evidence another written offer actually exists. If you can see the other offer, you would know it’s real – and whether or not you want to bid for the property.
Is there a solution to this muddle?
There’s probably no answer that will make everyone happy, but here’s a middle-of-the-road idea: Why not have an offer confirmation form for buyers?
It would work this way: Local real estate organizations would have a special offer confirmation form prepared by their attorneys. In basic terms a buyer who does not want their offer price and terms disclosed can require confidentiality as a condition of making an offer. In turn, to protect the seller and the seller’s representative, the buyers will provide a signed form which simply says on x date they made an offer to purchase the property. In this way other buyers can know there really has been an offer but the original offer cannot be “shopped” because no prices or terms are shown.
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Peter G. Miller Peter G. Miller is author of "The Common-Sense Mortgage," (Kindle 2016). Have a question? Please write to firstname.lastname@example.org.