Saw this note buried inside the Realtor remarks on a listing yesterday:
“If the buyer is making multiple offers, please disclose on a separate addendum.”
The question is, does a buyer need to do so?
It’s understandable why a seller would want to know whether a buyer is making offers on multiple properties, hoping that one will be accepted. It only makes sense for a seller to think twice about accepting an offer from someone who may not be fully committed to their particular home and who may change their mind if another offer comes through.
And it’s for the exact reason I would never have a buyer make such a disclosure – it makes no sense from the buyers standpoint to do something that will make it even more difficult to get an offer accepted.
For the past several months, writing multiple offers has been the only way to fly for those looking at bank owned homes. It makes no sense to lose an opportunity on another home while waiting several days for the lender to make a decision on one.
With extremely few exceptions, these sellers never disclose that they are considering multiple offers at once – it’s an assumption one has to make as the buyer based on the current market conditions. And if a seller isn’t required to disclose they’re looking at more than offer, why would a buyer need to disclose they’re writing more than one offer?
There’s one section of the AAR Residential Resale Contract that on the surface appears to throw a wrench into the equation:
5c. Buyer Warranties: Buyer warrants that Buyer has disclosed to Seller any information that may materially and adversely affect the Buyer’s ability to close escrow or complete the obligations of the contract.
Now … standard disclaimers apply: I’m not an attorney and am not providing legal advice in any way shape or form, simply my own opinion. Does not include tax and title, mileage and results may vary, not valid in all states, limited time only.
Could the presence of other offers written by the same buyer, when the buyer only wants to purchase one property, constitute “information that may materially and adversely affect the Buyer’s ability” to buy this specific home? Possibly, but I believe it depends on the intent.
If the buyer’s intent is to purchase this home if an offer is accepted, then I don’t have an issue with multiple offers for this reason – circumstances change, and the contract allows the buyer an out with the inspection period. Properties that seemed suitable on Tuesday may be suitable to a buyer on Thursday for reasons as simple as the discovery of barking dogs or, if you live near one of my neighbors, a really loud and proud rooster.
It’s not a cut and dried situation but, then again, very few things in real estate are.
[tags]Phoenix real estate[/tags]