Log In   ·   Become A Member

When Selling A Property, What’s The Difference Between An Offer And An Accepted Offer, And What’s The Broker’s Responsibility To Cooperate?

John A. Viteritti

Buyers and Sellers have certain misconceptions when selling and buying a home. (Photo: Nicole Barylski)

Buyers and Sellers have certain misconceptions when selling and buying a home. This article addresses some of them.

A seller receives an offer from a buyer to purchase the property. The seller accepts it. Does that meet the definition of an accepted offer? Not according to Anthony Gatto Esq., Director of Legal Services for the New York State Association of Realtors. In a recent NYSAR publication he stated: "It is my opinion that an "accepted offer" in New York is one where a document that can bind the parties to the sale is executed by both parties either with a 'wet' signature or electronically." He goes on to quote New York's Statute of Frauds regarding real estate transactions to support his opinion. (See New York's General Obligations Law).

This poses the question: What is a broker's obligation with respect to offers and accepted offers? Does a broker have to disclose to buyers and other brokers that an offer has been made on the property? Gatto wrote: "A Realtor practicing in New York is not required to disclose a verbally accepted offer unless the seller gives permission." That permission to disclose does not impose upon the seller or the broker an obligation to disclose the terms of the offer. Gatto does differentiate between offers and accepted offers with respect to disclosure. The law in New York does require a broker to disclose to buyers and cooperating brokers the existence of accepted offers, but not the terms of the agreement between seller and buyer. A broker cannot honor a seller's instructions not to disclose that there is an accepted offer.

Let's exam other issues regarding sellers, brokers, and duties to cooperate with other brokers. What if the seller informs his broker not to deal with buyers' brokers? While this attitude is not in the seller's best interests, it also violates the New York Department of State's instructions regarding a real estate broker's conduct. Once again, let's look to Gatto: " Buyers have a right to be represented by whomever they choose, and therefore, listing agents cannot obey the request of their seller to deny access to a buyer's agent." What is also true, the seller does not have to agree to pay a buyer's broker's commission although I do not consider it to be in the best interests of the seller to refuse to do so.

Another issue that deserves clarification pertains to a seller and the seller's broker's obligation to respond to offers submitted by other brokers. The broker representing the seller is obligated to submit all offers to the seller. The seller is not required to respond. Gatto advised that NYSAR does have available a form - Affirmation Request: Presentation of Purchase Offer Pursuant to Standard Practice 1-7 of the National Association of Realtors that pertains to this issue.

A final point I would like to address is when should the seller and his broker stop showing the property? I think the answer is after title passes. Until then, anything can happen. Better to have back-up offers than start all over again. I would advise that a broker not do otherwise except on the advice of the seller's attorney.

There are many scenarios that could be exceptions to situations addressed in this article. Advice of legal counsel should be sought in any given situation.

John is a St. John's University graduate, licensed Real Estate broker, DOS Certified Instructor, lecturer, teaches real estate license classes at Cook Maran Real Estate School, and is a well-respected consultant to the real estate industry. He previously taught at LIU and NYU. www.johnaviteritti.com

Be the first to comment on this article. (Just fill out the form below)

Submit Your Comment

Please note, you are not currently logged in. Your comment will be submitted as a guest.
To submit your comment as a member, please click here.
Your Name:
* Comments will be reviewed and posted in a timely fashion
* All fields are required
What color is a firetruck?
(For spam prevention, thanks)
BNB Bank
For over 100 years Bridgehampton Bank has been the East End's hometown bank. Many success stories...one bank, BNB!

Hamptons Carpet One Floor & Home
We pay less,and so do you.With over 1,000 stores in our buying group, we can get the lowest prices from the best flooring manufacturers — and pass the savings on to you.Visit our other locations: Hamptons Carpet One Floor & Home, 675 North Sea Road,Southampton, NY 11968

CP Complete- Landscape Design & Construction
Paul Guillo And Chris Hall Two Of The Most Respected Names In The Community Together, they are partners in CP Complete. They bring their years of experience and integrity to creating and renovating luxury backyards.

Hamptons luxury real estate specialist for 33 years, Andrea Ackerman offers outstanding expertise in the field.
Hamptons luxury real estate specialist for 33 years, Andrea Ackerman offers outstanding expertise in the field. Trusted, experienced and successful, Andrea has solidified herself as the go-to broker of the Hamptons and a wholehearted advocate for her clients. A pioneer in the real estate industry on the East End of Long Island, she is driven by her passion for the business. Andrea is based in the Bridgehampton office of Brown Harris Stevens as a licensed real estate associate broker and consultant. Formerly, a principal partner and Senior Director at Brown Harris Stevens, Andrea now assists in developing their corporate strategy for the Hamptons region, advising other brokers and sales associates, as well as being one of the top producers and listors.

Brown Harris Stevens is the quintessential luxury real estate firm, with a history of leadership and a culture of professionalism and discretion dating back to 1873
Brown Harris Stevens is the quintessential luxury real estate firm, with a history of leadership and a culture of professionalism and discretion dating back to 1873. At every level of Brown Harris Stevens, you will find highly experienced, knowledgeable experts, single-mindedly devoted to your interests and your satisfaction. With offices in the Hamptons, New York City, Palm Beach, and Miami our brokers are exceptional - leading the field with the quality of their work ethic, their outstanding success rate and the sheer quantity of their transactions.

Southrifty Drug 54 Jagger Lane, Southampton Village
Southrifty Drug is a small, neighborhood pharmacy with limited shelf space, and we have to be very selective about which over-the-counter items we carry. As a result you'll find a no nonsense concentration of very effective, high quality and useful products on our shelves. In this new section, we feature a number of these products that we feel are especially worthy of your consideration.