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Navigating Real Estate Sales with Multiple Offers

When you receive an offer on a property, it’s exciting, right? But, when you receive multiple offers, the situation can become complex — rapidly. How you deal with this type of situation is important from a legal standpoint. Real estate licensees need to be careful that you navigate multiple offer situations by the book to ensure you don’t end up facing a lawsuit. 

In this blog, we’ll look at the risk factors  to help you to avoid the significant legal and financial consequences that come with lawsuits. 

Risk #1 Communication with buyers and sellers

The main risk area for real estate licensees dealing with multiple offer situations is communication. That is the communication of the offer to the sellers and the communication back to the buyers interested in purchasing the property. 

It is important that you, as the seller’s representative, present any written offers submitted on a property to the seller promptly. Acceptance of an offer is ultimately the seller’s decision and not yours. A real estate licensee may provide expert advice to your seller about what offer seems the best value for the seller. For example, where there are two offers for the same amount but one of them is a cash offer with a shorter closing time, this would be most advantageous to the seller. 

Real estate licensees should be wary of the way they communicate with the buyer and be sure to not accept any offers on the seller’s behalf without their express permission. You don’t want to be in a situation where your seller does not accept an offer but the buyer thinks it’s a done deal.

An email signature block, name, or email address in the “from” section of an email can be considered a valid signature if business is being conducted primarily by email. Add a disclaimer to your email signature that specifies “emails sent and received shall not create a binding contract or acceptance of an offer until the written contract is signed by all parties.”  See Multiple Offers: How to Reduce the Risk of a Lawsuit.

If you have several offers to present, you can choose to show all the offers in one document such as a spreadsheet with a summary of the significant terms of each offer. For example, the amount offered, whether it’s a cash offer or not, and the proposed settlement period. You can then have a discussion with the sellers about all of the offers available so they can make an informed choice about which offer to accept (if any). 

Risk #2  Documenting and disclosing multiple offers

When communicating with your seller and prospective buyers, all offers and decisions must be documented. Ensure any offers are submitted in writing and any counteroffers or acceptances of offers from your client are in writing so there is no confusion or potential for misunderstandings. Also, document your communications with potential buyers and clients so that you can show evidence if required in a court of law if facing a legal challenge. 

Real estate licensees need to help guide their sellers so they don’t get into a situation where they have accepted multiple offers. For example, if you’re forwarding multiple offers via email to your client or through automatic software, make sure it’s clear they should not sign anything, and it’s for their information and review. They should only sign the offer they plan to accept when they are ready to do so. More on handling multiple offers.

Risk #3 Confidentiality and ensuring a fair and transparent process

Real estate licensees need to be mindful of confidentiality when it comes to multiple offers. The National Association of REALTORS® Code of Ethics states that real estate agents should only disclose to buyers that there are offers on the property with the permission of the seller. Sellers will often consent to this in an effort to build excitement about a property,  ultimately getting them the best price and terms through a bidding war. 

When multiple offers are received, it’s not uncommon for a seller to call for best and final offers from prospective buyers. When this happens, real estate licensees need to ensure that all prospects are treated equally and everyone is given the same opportunity.

Risk #4 Avoid conflicts of interest

Real estate licensees need to ensure they do not have a conflict of interest when it comes to multiple offers that could result in bias. For example, if you have a friend or family member bidding on the property or even a colleague, it is important you don’t encourage the seller to accept their offer before looking at others. If you do find friends, family, or colleagues are bidding on a property, you should disclose any potential conflict of interest upfront to avoid a potential lawsuit. 

Protect Yourself and Your Clients

CRES is a real estate Errors & Omissions insurance specialist with more than 25 years of experience. With CRES E&O + ClaimPrevent®, you will have access to our team of qualified real estate attorneys who can provide you with advice when you need it. 


We have access to more E&O options than just about anyone, as part of AJ Gallagher, one of the largest insurance brokers in the world. Let us find you the best coverage for the best price. Contact the CRES team at 800-880-2747 for a confidential discussion today.

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