2.14 THE BUYING PROCESS

When the buyers have found the right property, the next step is to prepare and negotiate an offer that will lead to a signed sales contract between the seller and the buyer. The buyer’s broker must prepare a CMA to establish a price for the buyer to offer. Factors to take into consideration include:

• Property condition – Does the property need a lot of repairs?
• Length of time on the market – This indicates the selling pace of the market, the level of inventory, or a potential problem with the property.
• Supply and demand – Essentially, when supply increases and demand remains stable, prices go down; when demand increases and supply remains stable, prices go up.
• Sellers motivation – Is the property in distress, pre-foreclosure, or requiring a short sale?
• Terms and contingencies – The fewer the contingencies, the stronger the offer, making it more attractive to the seller or bank (if property is bank-owned or requires bank approval for a short sale).

When buyer brokers are working with two or more clients who are seeking similar properties in the same price range, the buyer’s broker is permitted to show alternative properties to any prospective buyer or tenant.

Specifically, the buyer’s broker does not breach a duty or obligation to the client :

• by showing alternative properties to other prospective buyers or tenants,
• by showing properties in which the client is interested to other prospective buyers or tenants,
• by making or preparing contemporaneous offers or contracts to purchase or lease the same property.

However, brokers must provide written disclosure to all clients for whom the licensee is preparing or making contemporaneous offers or contracts to purchase or lease the same property and shall refer to another designated agent any client that requests such referral.

Presenting and Negotiating the Offer
Once an offer has been made and the buyer has signed the purchase agreement and disclosures, the buyer should immediately receive a copy of all of the documents that are signed. The real estate agent of the buyer should then promptly submit the signed purchase agreement along with the signed disclosures, pre-approval letter from the lender or proof of funds and a copy of the earnest money check if any.

This can be done in person or electronically to the agent of the seller. The agent of the buyer should be available if there are any questions regarding the offer.

The listing agent must present all offers to purchase or lease as soon as possible.

Disclosure of Contemporaneous Offers
“Contemporaneous Offers” shall be offers to purchase or lease on behalf of two or more clients represented by the same designated agent for the same real estate parcel or rental unit that the designated agent knows or has reason to know will be taken under consideration by the owners or owners’ representative at the same time. If there are contemporaneous offers from two or more clients of a designated agent, written disclosure shall be provided to the clients of the designated agent and referrals of clients to other designated agents shall be completed, if requested by the client.

The agent that is involved in a contemporaneous offer cannot disclose any information about the offers to any of the other clients.

Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or adjust the closing dates. The listing agent must promptly submit any counteroffer back to the buyer’s agent.