Recently I was drawn into a conversation around a buyer and seller who had fallen out because the seller had denied having verbally accepted an offer from a buyer introduced to their property through their real estate agent. Both the buyer and seller placed the blame directly with the agent, as both parties perceived the agent to have failed at bringing the deal together.
As perception is reality, the question is – how did the agent get into this situation in the first place? The answer is simple – the agent did not adhere to ‘industry best practice’. To quote the Real Estate Agents Act ( Professional Conduct and Client Care ) Rules 2012 – “10.10 A licensee must submit to the client all offers concerning the grant, sale, or other disposal of any land or business, provided that such offers are in writing.”
When an agent agrees to represent a buyer’s verbal offer to their seller, the agent puts themselves and the relationship with their buyer and seller at great risk. There is the risk of the agent misrepresenting the buyer’s offer when presented verbally as there can be complexities around dates and time frames. Without these details in writing, misunderstandings are likely to occur, negotiations down the track will likely turn sour with and parties will be looking for someone to blame.
Verbal offers from buyers tend to be low offers, used as a buyer’s strategy to test the seller’s lowest price. Sellers are likely to be insulted by low verbal offers. When this happens the offer is most likely to be rejected outright, and any further attempts at negotiation between parties become very stressed.
By not adhering to the NZ real estate industry’s best practice of presenting ‘all offers in writing’, the agent has put themselves at risk of being blamed for any misunderstandings that verbal offers often trigger. Then furthermore the agent risks having a complaint lodged against them either through the real estate company’s in-house process or through the industry’s REA’s complaints process.