Can a Buyer's agent be present when you present their client's offer to the Seller?

Does a buyer's agent have the right to participate in the presentation of an offer?

QUESTION:  I have a property listed in the local MLS. A buyer's agent arranged a showing last week. She just called to tell me that her clients have signed an offer to purchase the property. The buyer's agent wants to be present when that offer is presented to my seller-client. When I told her to just send me the offer, and that I would present it to my client, she told me that she had the right to participate in the presentation. Is she right about that?


ANSWER:  Since the property in question was listed in the MLS, the answer is yes. The right of a cooperating agent to participate in the presentation of any offer he or she secures is governed by Section 2.3 of the Model MLS Rules and Regulations.


Keep in mind that MLSs owned or controlled by a REALTOR® association must conform their governing documents to mandatory MLS policies established by NAR's Board of Directors. NAR publishes a handbook to guide member associations in that process. The handbook includes model rules and regulations some of which are considered mandatory. Rule 2.3 is one such mandatory rule. It states: "The cooperating broker (subagent or buyer agent) or his representative has the right to participate in the presentation to the seller or lessor of any offer he secures to purchase or lease. He does not have the right to be present at any discussion or evaluation of that offer by the seller or lessor and the listing broker."


There is an exception in the model rule. Your seller can give you written instructions that the cooperating broker not be present when the offer secured by that agent is presented. If that happens, you can and should abide by those instructions. However, the cooperating broker has the right to a copy of the seller's written instructions.


A corollary to Rule 2.3 is another mandatory rule, Rule 2.4. It gives listing brokers the right to participate in the presentation of any counter-offer made by a seller or lessor. The listing agent does not have the right to be present for any discussion or evaluation of that counter-offer by the purchaser or lessee, except when the cooperating broker is a subagent.

NCAR provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.


© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NCAR members, who may reproduce and distribute it to other NCAR members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited. 
 

When does a back-up contract become binding?

QUESTION: We represent a seller who is under contract to sell her home. A buyer agent representing another buyer recently delivered an Offer to Purchase and Contract with a Back-Up Contract Addendum attached, along with checks for the Due Diligence Fee and Initial Earnest Money Deposit.  Our firm is named as the Escrow Agent.  The seller has accepted the second buyer’s offer and we communicated that to their agent.



I have a couple of questions. First, is the Back-Up Contract a binding contract now or does it become binding only if and when the contract between the seller and the first buyer is terminated?  Two, what do we do with the DDF and Initial EMD checks?



ANSWER: To answer your first question, the Back-Up Contract became binding when it had been signed by both parties and the seller’s acceptance was communicated to the buyer agent.  The parties’ respective obligations to complete the transaction are indeed contingent on the primary contract being terminated, but the existence of that contingency doesn’t mean that the Back-Up Contract isn’t a binding contract now.



To answer your second question, since the Back-Up Contract has become binding, the EMD should be deposited in your firm’s trust account no later than 3 days following the Effective Date of the Contract. On the other hand, the Real Estate Commission’s Rule on handling trust money (58A.0116(b)(4)) requires you to either deliver the Due Diligence Fee to the seller or return it to the buyer, according to the instructions of the buyer, no later than three business days after the Effective Date of the Contract.  Thus, you should contact the buyer agent for the “back-up” buyer and request instructions on what to do with the DDF check.



Note that paragraph 9 of the Back-Up Contract Addendum provides that the DDF becomes due and payable within five days after the seller has notified the buyer under the Back-Up Contract that the Back-Up Contract has become primary.  It’s the Buyer’s choice, but presumably, he or she would prefer to have the DDF delivered to the Seller only if and when the Back-Up Contract becomes primary. If that’s the case, you need to return the DDF to the buyer agent right away in order to be in compliance with the Real Estate Commission’s Rule.



NCAR provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.


© Copyright  2015. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NCAR members, who may reproduce and distribute it to other NCAR members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited.