Can an Agent Refuse an Offer?
Disclaimer: This is not legal advice. If brokers, agents, clients or customers have any question about whether or not a specific refusal to present an offer is lawful, they should consult with their respective attorneys.
This may sound like hair-splitting, but there is a difference between “rejecting” an offer and “refusing to present” an offer.
Ultimately it is Seller’s responsibility and choice to either accept or reject offers. If a Seller “rejects” an offer one might think this is the same thing as to “refuse an offer,” but is it?
To refuse an offer seems to imply that the offer is being pushed back at the time of submission and is therefore not making it to the consideration phase where the Seller may choose to accept, reject or counter it. I tend to think of refusing an offer as “cutting it off at the pass.”
A Listing Agent’s job is to present all offers to the Seller…unless…the Seller has given the Listing Agent specific, lawful instructions on how he or she wants offers screened before being presented for consideration.
So Why might a Seller Decide to Refuse an Offer?
The reasons a Seller might elect to refuse an offer are typically due to conditions that are equally applicable to any and all potential buyers such as financial qualification or some transactional aspect of an offer. For example, the Seller may require that offers be accompanied by a pre-approval letter indicating that the Buyer is financially able to get a mortgage and close. Maybe there is a minimum dollar value a Seller wants to impose, or perhaps the Seller wants to exclude offers with specific contingencies such as a Closing of Buyer’s Property Contingency, or some other term or condition the Seller is unwilling to entertain such as a Land Contract or Rent-To-Own financing.
Why would a Seller Instruct their Listing Agent to Refuse an Offer?
Most likely as a time saver. The Seller may choose to delegate the decision to refuse an offer to their Listing Agent. Because the Listing Agent works for the Seller, the Seller may elect to empower their Agent to perform an initial screening of offers. If the Seller instructs his or her Listing Agent to refuse an offer that fails to meet a lawful pre-condition set by the Seller, then as their listing contract indicates, it is the Broker’s duty to fulfill lawful requests that are within the scope of the agency agreement.
So the answer to the question “Can an Agent Refuse an Offer?” is…Yes…provided he or she has received a lawful instruction from their client to do so.
Is there a Downside to Telling your Agent to Refuse an Offer?
There could be, yes. Real estate transactions can be pretty fluid up to the point of acceptance or rejection and their final terms are frequently modified (maybe several times) in the give-and-take of negotiation. Ultimately, Buyer and Seller reach an agreement…or part ways. Sellers, in my opinion, should regard an Offer to Purchase as the invitation to negotiate rather than a take-it-or-leave-it proposition. Rather than refuse an offer out of hand, I would personally advise my clients to let me present any offer that comes in… because the Seller is always free to counter back with terms that are more acceptable to them. I have had clients who were dead-set against the initial terms of an offer only to eventually accept the Buyer’s offer once the terms had been successfully negotiated. As a Seller, you can instruct your Agent to refuse an offer that does not meet a lawful pre-condition you have identified, but keep in mind: if you don’t have an offer…you don’t have anything to negotiate.
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