Rumor has it that offers, amendments and counter-offers are not being written, submitted or presented in Wisconsin real estate practice. Now, I’m not a big gossip and don’t usually participate in perpetuating a rumor, but if the rumor has to do with potential bad behavior by real estate licensees, I tend to perk up. The nature of this article is simple — to serve as a reminder of what a real estate licensee is supposed to do when it comes to written proposals; written proposals include but are not limited to offers, counter-offers, amendments and notices.
Learn, love, live this mantra: "Draft. Present. Provide."
You must draft a written proposal, unless contrary to specific instruction of the other party.
You must present all written proposals received by the licensee.
You must immediately provide a written statement to the other party’s firm as to the date and time when the offer was presented.
You must draft
As an agent, it is neither ethical nor legal to refuse to draft an offer for a buyer. Even as a buyer’s agent, while you may advise your buyer as to a recommended price, the buyer may not heed your advice and write the offer for too high or too low in your opinion. At the end of the day, it is their transaction, and you must oblige.
If a seller doesn’t want to see or hear about offers with certain terms, then the seller can provide guidance to the listing agent who has the ability to refuse to draft a written proposal or communicate term limitations or requirements to prospective buyers and agents. For instance, if the seller says, “I don’t want to see an offer unless a loan approval accompanies the offer,” or, “I will only entertain offers with $X earnest money.”
The Cooperation, Access to Property or Offer Presentation section in the WB-1 Residential Listing Contract allows a seller to provide specific written instructions for showings and submission of offers. In this section, the seller agrees that the broker will cooperate and work with other agents, including subagents and the buyer’s brokers, except as specified in the blank line near the end of this section. The listing agent would document the seller’s instructions by placing them in the listing or an amendment to the listing contract.
Upon the direction of the seller, the listing broker may communicate the seller’s requirements to cooperating agents so they understand why the listing agent will not draft or submit an offer per the buyer’s instructions. Per the buyer’s specifications, the buyer may have an attorney draft an offer, however the listing agent is still not required to submit the offer to the seller if submission is contrary to the seller’s instructions.
You must present
Wisconsin administrative rules emphasize that licensees cannot withhold any written proposal from presentation pending the party’s action on a written proposal previously presented. For instance, if offers are received at the same time, you cannot wait until the seller makes a decision on one offer before presenting another. Also as a reminder, the transaction is between the parties, so when you present written proposals, you provide the advantages and disadvantages of each.
Licensees shall promptly present all received written proposals to the client or customer. Licensees are required to promptly present all written proposals to their clients and customers, in other words, buyers, sellers, owners, tenants and others seeking an interest in real estate or a business opportunity.
Lesson: When you receive an offer, a counter-offer or an amendment, you promptly advise your client that they have received such document and promptly present that document to them.
You must provide
You must immediately provide written statement to the other party’s firm as to the date and time when the offer was presented.
The lines at the very end of the offer to purchase contain areas where the presentation of the offer to the seller and the seller’s disposition of the offer may be documented. In addition, the licensee must immediately provide the same information regarding any rejection or expiration without acceptance when such a statement is requested.
The rule clearly requires all licensees to promptly advise their clients and customers whether the other party has accepted, rejected or countered the party’s written proposal. The agent who wrote the offer for the buyer can request that the listing agent provide a written statement indicating when the offer was presented to the seller and whether the seller acted on the offer by accepting or rejecting it or whether the seller let the offer expire.
Although the rule clearly prefers that licensees try to have the party’s action as to an offer or written proposal documented, sometimes the party refuses. When there is no communication between the two agents regarding action taken by the party that received the offer or other written proposal, then the agent may document attempts to contact the other agent. If the agent has made such a request and the other agent does not respond promptly with a written statement, the agent or the broker may contact the listing agent’s supervising broker regarding the matter or consider filing a complaint with the REEB.
Cori Lamont is Director of Corporate and Regulatory Affairs for the WRA.