I mentioned that a couple of offers have come in over list price on the REO listing in Oceanside, both of them a net $133,000 offer price. A reader remarked:
"Is it ethical to reveal details of offers? After all you don't reveal details of open escrows."
Let's review the definition of fiduciary:
"One often in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor, and loyalty in fulfilling the obligation."
My interpretation of fiduciary is to do everything I can to benefit my client. Does announcing the offer prices publicly do that? I think it does - it puts other buyers on notice that:
1. Other over-list-price offers are in.
2. Gets them to act promptly if they want to participate.
3. It makes it clear what the number is to beat.
Number three is the most important. How many times has a buyer gotten dejected because they hear that there are multiple offers, and then the listing agent further deflates them by not giving them a number to shoot at. It happens all the time, and if the buyer just had a number to beat, they might do it.
I think it is my fiduciary duty to announce the offer prices, creating an auction setting. I'm already 8% over list price, the only time I could be compromising my fiduciary duty is if a buyer out there is thinking about offering 20% over, and sees that he only has to bid 10% over to get it. In this environment, I'll take my chances on that not happening much. I'd rather inspire those waiting buyers with a number to hit - then it just becomes a yes or no, instead of playing games.
There is enough insanity out there for buyers, I'm not going to contribute to it if I can help it. I told one agent who called about writing an offer that there were multiple offers in that were over list price. What does she do? Writes a $120,000 offer on a $127,900 list price. I guess you have to do what your buyers want you to do, but don't you try to explain to them that they are wasting their time? She thought her offer might be stronger - sorry, it'll take more than that.
One of the agents who made one of the $133,000 net offers called back to to see if he was going to be the winner, and I said no, you are going to have to do better. He improved his offer by another $4,000. I think the seller will be happy I said that. In summary - let's stop with the games and just make it easy for buyers to buy.
As for the revealing of the sales prices once in escrow, I think that is an old wives tale, and I don't know why we make such a big deal out of it. Agents guard the sales price with their life until recorded, thinking that if it gets out of the bag that they have somehow breached their duty. Everyone I know who has been around the business a while knows that sellers are liable to change their mind at any point about what they sell their house for. If I have a listing at $1,050,000, and I told you it was in escrow for $1,000,000, and it fell out of escrow - don't be surprised if the seller doesn't agree to sell it again for that - they might go higher OR lower.
I don't make it a habit to tell people what the sales prices are, because it is so standard that they aren't revealed I rarely get asked. But if an agent or appraiser asked me to help them with another deal, I tell them. I don't think it's a big deal - though most every agent who reads this will be up in arms at the thought.