ONE- COMMONLY ASKED QUESTION to the Enforcement Division involves a listing agent’s duty to notify the seller of multiple offers. TREC rule 535.156(a) specifically requires a licensee to “convey to the principal all known information which would affect the principal’s decision on whether or not to accept or reject offers.” Subsection 535.156(c) further provides that “a licensee has an affirmative duty to keep the principal informed at all times of significant information applicable to the transaction or transactions in which the licensee is acting as agent for the principal.” Thus the rules require the listing agent to submit all written purchase offers to the seller until a buyer and the seller have a fully executed contract.
Although the general rule is that all offers must be communicated to the seller by the listing agent, there are a few exceptions. These include instances where the seller has specifically instructed the listing broker not to bring the seller any offers below a certain price, or situations in which a binding contract has be executed between a seller and buyer. In the latter situation, Rule 535.156(a) provides that the licensee shall have no duty to submit offers to the principal after the principal has accepted an offer.”
Furthermore, the listing agent is prohibited from sharing any information about one buyer’s offer with another buyer. Note, however, that in the end, it is always the seller’s decision whether to accept or reject offers they receive. The listing should address the broker’s duty regarding back-up offers so as to avoid confusion on the issue. Also, trade association rules may affect the broker’s duty.