Welcome to the Case of Missing Disclosure!

The 2006 revisions to the Code of Ethics introduced a few new disclosures that I thought would be of interest!"? I'd like to begin with:

SOP 1-13: When entering into Buyer/Tenant Agreements REALTORS"? must (emphasis added) advise potential clients of: (and here is the new one) #5 the possibility that sellers or sellers' representatives may not treat the existence, the terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties (Amended 1/06). http://www.realtor.org/mempolweb.nsf/pages/code

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Along with this new provision in the Code, the NAR also posted on their REALTOR.org website a piece regarding negotiating of multiple offers."? Boards of REALTORS"? all over the country were deluged with questions on how to handle this matter."? What I saw was a mass panic attack! Sellers' agents automatically believed that they now had the right to shop offers."? Not so fast sellers' agents!"? Let's look at another Code of Ethics Provision which was also modified:

"?SOP 1-15: REALTORS"?, in response to inquiries from buyers or cooperating brokers shall, with the sellers' approval, disclose the existence of offers on the property.(01/03) Where disclosure is authorized, REALTORS"? shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (01/06)

"?These two provisions go hand in hand, don't you agree?"? As a listing agent, if I have competing offers on a property, I MUST ask the seller if they want those competing buyers to know of the existence of the competing offer."? The original disclosure requirement was made in January of 2003."? Yet many REALTORS"? never knew it existed."? As a result many listing agents were disclosing to competing buyers and agents the existence of multiple offers, without the seller's consent."? AND many sellers were loosing a sale due to the fact that the buyers withdrew their offer because they didn't want to be involved in a bidding war. Often the withdrawn offer was the best offer. Multiple offers are always a problem because people want to know" "Who has the OTHER offer' So the Professional Standards Committee recommended the new 2^nd half of the SOP1-15."? When there are multiple offers on a property"or the potential for multiple offers, i.e. one offer is in and another agent calls to ask if there are offers on the property because their buyer wants to write one" the listing agent MUST ask the seller for direction regarding disclosure of those facts.

"?Now back to the buyer!"? The disclosure to the buyer, through their Buyer Rep Agreement, or other type of disclosure absent a Buyer Rep Agreement, must be told that the existence of, the terms of, and the conditions of their offer may not be kept secret if the seller, upon receiving their offer, chooses to disclosure the same to other buyers."? This term has always been referred to as "shopping the offer"."? How many of you are currently making this disclosure to the buyer?"? How many of you have added it to your company agency policy or Policy and Procedures Manual?"?

"?But I believe the bigger question is "How does your state treat confidential information' What does the definition entail AND is a confidentiality agreement necessary if a buyer wants their offer to maintain confidential or is that already covered in your law."? What say you ?