The Good Old Boy Network

In the real estate community it is a regular practice for an agent to call an agent with a listing and ask to be notified if any offers come in. Or they might ask are there any offers? There seems to be this thought that the listing agent owes the other agent "insider information".

The fact is that giving that information out can sometimes hurt the seller. Here is why; If the buyer knows there is another offer, they may take the position that they do not want to get into a bidding war, and so they do not make an offer and keep looking. Meanwhile the offer you had dies for one reason or aother. Or maybe it never gets accepted. So you call the other buyer and his agent says we already found another property and made an offer on it.

So if the listing agent simply says "The property is available" then the buyer might decide to make an offer. The fact that there is another offer means nothing. An offer is only an offer, and is not a deal. The property is available until there is a fully signed around purchase & sale agreement delivered to both buyer and seller.

Example: The listing agent and seller get offer number one. It is 20% below asking price with unpleasant terms. The agent tells the second buyer's agent that the property is available. Second buyer makes a better offer and the seller accepts it happily.

If the listing agent had told the buyer's agent that another offer was being considered, and the buyer went and bought something else, then the seller was harmed. And the agent's job is to do no harm.

Thus it is the listing agent's responsibility to discuss with the seller whether or not information about offers should be given out. And the agent needs to explain all the above to his/her seller so the seller can make their own decisions about what to divulge and when, knowing what the possible concequenses are.

Often I find other agents upset with me for refusing to divulge this kind of information or call them when another offer comes in. It is part of the "good old boy network rules" that you give this information out. In this, I choose not to participate in the good old boy network, and to represent the best interests of my sellers instead.