Fly On The Wall: Line Up Behind Multiple Offers
Legally, the broker you hire to sell your home is obliged to tell you about all offers that come in. Tomacor actually found a reference to this while training potential home inspectors in the Illinois Human Rights Act (775 ILCS 5). If your agent doesn’t present every offer to you, it is a violation of your human right in Illinois. In reality, there is a limited amount of time between the point at which the agent is given a signed contract for purchase and the seller signs the contract making it legal. Tomacor has seen this period extended out to a week or more as the agent who was holding the contract scourers her list of known buyers trying to talk them into a higher price (and a bigger commission for her) than the signed real estate contract she holds.
Agents know that most buyers are naïve and willing to accept the notion that it takes a week or more to get your contract to the seller. What’s really going on is that the perceived desirability of a house with a contract on it is significantly higher than one with no activity and the agent can play the trump card claiming that you can’t negotiate latent defects because there is another contract pending on the premises. In fact its not pending at all, it’s in their pocket. In this way, a higher purchase price and commission can be squeezed out of the deal by the agent who wishes to manipulate the process.
A separate but equally likely scenario is that your broker may be holding your contract while hustling all the actual or potential buyers in his office so that he can get both the buyers and sellers commission. After all, why should he split the commission with anyone else if he can get the full seven percent?
Sellers must be clear with their brokers that you want to be informed of all offers or you may be leaving your broker to make decisions that you should be making. The obligation to disclose all offers should be explicitly stated in the real estate contract.