Real Estate Trends: Why a Seller Has to Offer His Home to the Buyer

In a recent column, a seller wrote in that his agent had a buyer for his house at the full asking price. The only quirk in the deal? The sellers had to write up the full price offer. The seller wanted to know if I had heard of this practice and why it was used.

I thought it was strange, but a number of agents all over the country have responded that this has either happened to them or they have employed this tactic in an aggressive move to get the deal done. Others say this wouldn’t work in their state.

There is an undercurrent of concern that this is all about getting the seller to pay the commission – even though the buyer hasn’t brought a full price offer to the door. I’d argue that you’d need a signed contract for that.

I received more than a dozen comments. Here are a few, some of which have been edited for clarity or length. I’ll post the rest at

Comment: I think the misunderstanding about the buyer and the full price offer has to do with the agent’s commission. At least in Rhode Island, a seller does not have to take a full price offer but the agent has earned the commission if they procure one – even if the seller refuses it.

Ilyce Responds: I don’t think there is an offer on the table. The agent said the buyer was willing to pay full price. But as good real estate brokers know, you’ve got to have an offer in writing for it to be valid.

Comment: Here in California, when a listing is placed into the MLS there is an asking price and buyer’s agent’s commission (among many other fields) that must be filled in by the listing agent/broker.

A buyer’s agent can offer any price their client chooses (a full price offer is all the better). And of course the sellers can choose to accept, reject or in most cases, counter the offer.

In the situation you’ve described, there is no offer. Whether the agent is representing both the seller and buyer or the buyer and seller have different real estate agents (i.e. different brokerages) is not relevant.

The home if listed for sale simply needs an offer IN WRITING. If an agent is a dual agent and is “double-ending” the property, the same rules apply – write up an offer and present it to the seller(s).

Comment: I am responding to your recent question/answer column regarding an agent who told her seller she had a full price offer on their home.

My understanding is when we offer a home for sale through our multiple list system at a specific price and terms and have a valid listing contract with a seller, the seller is obligated by the terms of this contract.

If the listing Realtor presents an offer (written) at the exact terms offered, the seller may reject the offer but still owes the agent the full commission. If the seller decides to reject the offer, they must take their home off the market for six months through the multiple list system. I don’t know if they can then put the house up for sale by owner.

However, I am confused about a couple of points: Why didn’t the agent put the offer in writing and in this market, what seller wouldn’t jump for joy to get a full price offer?

I don’t think the author of the letter sent has told the whole story and Fair Housing Law plays a large role in a seller having to sell their home if an offer comes in that meets their price and terms. I am from Michigan and if I brought a seller a written offer meeting all their terms and price, whether they accept or not, I would want my commission.

Comment: In your recent column, you have the question about why a buyer would want a seller to make a contract that offers the house at the full asking price instead of the other way around. The question was “What motive could they have?”

As a small time buyer of various investment properties it struck me that it had a number of advantages for the buyer. If the buyer drew up a contract to buy, they would have to name a closing date, list any contingencies, mention possible financing and put down what may or may not be a refundable deposit.

If the seller draws up the same contract, the buyer receives it pre-signed with a fixed price and no deposit or other data given. He has a short term “open ended” contract that he can then flip, accept, delay or even attempt to re-negotiate the deal (slightly underhanded, but not unheard of).

It gives the buyer more “strength” if the seller has signed but he has not. I have had this situation on more than one occasion and it worked very well in my favor. This may not be the case on this one, but it is done.

Comment: I am a Realtor (since 1985) and about 15 years ago, in another downturn market, I had a listing which finally got an offer, albeit a low one. Months later, after several more price reductions, I contacted that agent who said the buyer hadn’t bought yet.

So the seller and I put together an offer – exactly what the buyer had offered months before and presented it back to the agent who took it to his buyer – and voila! We got the house sold. It was a great story that my manager had me talk about at several other offices in my company.

It’s also possible that this buyer just won’t get off the fence to make the move. Who knows?

Sept. 19, 2008.