Window to the Law: How to Handle Multiple Offers

Window to the Law: How to Handle Multiple Offers

Sep 1, 2020
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Multiple offer scenarios can be stressful for sellers, buyers and their brokers. By following a few fundamental principles, real estate professionals can help their clients navigate multiple offers, alleviate misunderstandings and reduce the risk of discrimination.

Window to the Law: How to Handle Multiple Offers: Transcript

Presenting and negotiating multiple offers brings the potential for misunderstanding and missed opportunities. But, by adhering to a few fundamental principles, real estate professionals can avoid complaints and fair housing issues, while helping both the seller and buyer understand their options.

Multiple offers often arise when buyer demand exceeds the inventory of listed properties. Here are three principles you should follow when navigating multiple offers with your clients.

First, be mindful of your legal and ethical duties.

Be familiar with the laws and regulations in your state that spell out duties owed to a client, timeframes for presenting offers, and what may be disclosed to the other party in a multiple offer situation. For example, some states expressly prohibit revealing the terms of a buyer’s offer without that buyer’s consent.

The REALTOR® Code of Ethics also applies to multiple offer scenarios. Article 1 requires REALTORS® to protect and promote the interest of their client, while treating all parties honestly, and Standard of Practice 1-15 requires a REALTOR®, with the seller’s approval, to disclose the existence of other offers on the property when asked by a cooperating broker or buyer.

Second, be aware that “buyer love letters” can trigger fair housing concerns.

A “buyer love letter” could include letters, videos, photos, or any communication that accompanies an offer from a potential buyer to appeal to the seller. These “love letters” often innocently include personal information that reveals a prohibited basis for discrimination, such as “we can see our family celebrating Christmas around the fireplace” or “the wide hallways will accommodate my wheelchair.” Remember, fair housing laws are all about eliminating discrimination and ensuring that anyone who is qualified can purchase real estate. A love letter can trigger implicit bias, putting a seller in the position of preferring a buyer based on a “feeling” or something that the seller “just likes” about the buyer. Accepting an offer based on anything other than the price, terms and merits of the offer might violate fair housing law. Real estate professionals should discourage the use and consideration of buyer love letters to reduce the risk of discrimination.

Third, remember that the client makes the decisions.

As a real estate professional, you may educate your client about multiple offers and the various strategies for responding to them. You may even offer suggestions and advice based on your knowledge and experience. But it’s up to the client to decide what offers and counteroffers to negotiate, reject and ultimately accept.

With these fundamentals in mind, here are some best practices you can use in a multiple offer situation.

If you’re the listing broker:

  • Discuss the potential for multiple offers at the listing interview; explain the options available to the seller and get the seller’s instruction for handling multiple offers.
  • Explain the fair housing implications of a buyer love letter. Confirm that such letters should not be accepted, and if the seller insists on reading a love letter, advise that they consult legal counsel and document their decision-making process. 
  • Get the seller’s direction whether to disclose the existence of multiple offers to prospective buyers.
  • Make reasonable efforts to keep buyers’ representatives up to date on the status of offers.

If you’re the buyer’s broker:

  • Educate buyer clients about the current market and their options for making an offer. 
  • Remind your buyer that you may not know if there are other offers on the table.
  • Inform the buyer that terms of their offer may not be treated as confidential unless required by state law.
  • If the buyer insists on including a love letter, explain the fair housing concerns and do not read or accept the letter. 

You can help avoid complaints and reduce the stress inherent in multiple offers, when you remember the fundamental rules and treat all parties honestly. More resources are available at, including a downloadable client brochure that explains the multiple offer process.

Thanks for watching Window to the Law.

Additional Resources

Multiple Offers

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