In a recent article, The California Bureau of Real Estate (CalBRE) focused on a real estate licensee’s duty to present all offers.
Do buyer brokers ever complain that the listing broker did not present their client’s offer to the seller? Is the listing broker required by law to respond to every offer received, either verbally or in writing?

In investigating complaints from buyers and their brokers who claim their offers were never presented to the sellers, the CalBRE summarized the basic principles regarding the receipt and handling of purchase offers:

  1. A broker or salesperson must present all offers as instructed by his or her principal. Note the seller might instruct their broker to only present offers based on certain criteria such as all cash offers or offers meeting a specific price point.
  2. A seller may accept any offer, and the best offer might not be the highest offer.
  3. A seller and/or broker is NOT required by law to respond to and/or reject an offer, either verbally or in writing. The absence of a response is not unlawful and does not automatically mean the listing broker did not present the offer.

This does not mean that the listing broker need not worry about handling offers that the listing broker deems unsatisfactory. While California law may not require a duty to respond, the CalBRE investigating a complaint will require the listing broker to provide proof that all offers were presented to the seller, or alternatively, to explain why they were not presented. Note, the listing broker will further be asked to identify and provide for inspection ALL offers received for three years, whether accepted or rejected.

The CalBRE recommends a best practice would be to keep a transaction log to record “when the offer was received, whom it was presented to (if multiple sellers), how it was presented (in person, e-mail, fax, mail, etc), when it was rejected or, and by whom. Further, some comprehensive company policy manuals direct listing agents to provide the buyer’s agent with a written acknowledgement that the offer was reviewed and rejected by the seller  — this type of risk management practice can help lessen potential complaints.

Note that the local MLS rules may contain relevant guidelines for presenting offers. For example, NAR’s Handbook on Multiple Listing Policy states in Policy Statement 7.73 that cooperating participants have the right to participate in the presentation of any offer they secure to purchase or lease to the seller or the lessor. They do not have the right to be present at any discussion or evaluation of the offer by the seller or lessor and the listing broker. However, if a seller or lessor gives written instructions to a listing broker that cooperating brokers may not be present when offers they procure are presented, cooperating brokers have the right to a copy of those instructions.