An Issue with Buyers Making Multiple Offers

by | Oct 19, 2018 | Legal Tips

Recently I have heard of real estate agents helping their clients make offers on multiple properties at the same time. The buyer identifies two or three properties they like and submit offers to purchase all three but only intend to close on the one property they like best. If the various sellers accept more than one of the contracts the buyer uses the due diligence period to determine which house they want and then terminates the other contracts while under due diligence. Sounds like a great idea right?

Not really. Beside the fact the contracts may be unenforceable because they were offered in bad faith, the real estate agent’s actions actually violate state law.

SC Code §40-57-350(C)(1)(b)(iii) holds that an agent must disclose to the seller any material adverse facts concerning the transaction which are actually known to the seller’s agent. A material adverse fact includes “information that indicates that a party to a transaction is not able to or does not intend to meet an obligation under a contract or agreement made concerning the transaction.” When the buyer submits multiple contracts on property intending to only close one, the real estate agent has actual knowledge that the buyer does not intend to complete the transactions and this fact MUST be disclosed to all sellers.  Failure to disclose this adverse fact violates the statute and the agent is subject to sanctions by the Real Estate Commission and possible lawsuits by the spurned sellers.

BLAIR CATO congrats Cynthia Blair. Last week in Los Angeles, Cynthia was sworn in as President of the American Land Title Association (ALTA). ALTA seeks to improve industry oversight and protect consumers in the real estate transaction. You are probably familiar with ALTA settlement statements, surveys and title insurance documents. We are very proud of Cynthia and her commitment to the real estate industry.

Call Now Button