How do you handle it when an offer is on the table, and another offer is coming in and the offeror wants to know what he needs to do to beat the other offer. Please quote chapter and verse if you know where it is in Ethics and/or law.

Do what your seller says. Offers are not confidential.
Presenting and Negotiating Multiple Offers - White Paper

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"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their clients. This obligation to the client's interests is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly." (from Article 1 of the 2002 REALTORS® Code of Ethics)

"REALTORS® shall submit offers and counter-offers objectively and as quickly as possible." (Standard of Practice 1-6)

Perhaps no situation routinely faced by REALTORS® can be more frustrating, fraught with potential for misunderstanding and missed opportunity, and elusive of a formulaic solution than presenting and negotiating multiple purchase or lease offers and/or counter-offers on the same property. Consider the competing dynamics. Listing brokers are charged with helping sellers get the highest price and the most favorable terms for their property. Buyers' brokers help their clients purchase property at the lowest price and on favorable terms. Balanced against the Code's mandate of honesty is the imperative to refrain from making disclosures that may not, in the final analysis, be in a client's interests. (Revised 11/01)

Will disclosing the existence of one offer make a second potential purchaser more likely to sign a full price purchase offer—or to pursue a different opportunity? Will telling several potential purchasers that each will be given a final opportunity to make their best offer result in spirited competition for the seller's property—or in a table devoid of offers?

What is fair? What is honest? What is to be done? Who decides? And why is there not a simple way to deal with these situations?

As REALTORS® know, there are almost never simple answers to complex situations. And multiple offer presentations and negotiations are nothing if not complex. But, although there is not a single, standard approach to dealing with multiple offers, there are fundamental principles to guide REALTORS®. While these guidelines focus on negotiation of purchase offers, the following general principles are equally applicable to negotiation of lease agreements. (Revised 11/01)

• Be aware of your duties to your client—seller or buyer—both as established in the Code of Ethics and in state law and regulations. (Revised 05/01)

The Code requires you to protect and promote your client's interests. State law or regulations will likely also spell out duties you owe to your client.

• The Code requires that you be honest with all parties. State law or regulations will likely spell out duties you owe to other parties and to other real estate professionals. Those duties may vary from the general guidance offered here. REALTORS® need to be familiar with applicable laws and regulations.

Be aware of your duties to other parties—both as established in the Code of Ethics and in state law and regulation.

• Remember that the decisions about how offers will be presented, how offers will be negotiated, whether counter-offers will be made and ultimately which offer, if any, will be accepted, are made by the seller—not by the listing broker. (Revised 05/01)

• Remember that decisions about how counter-offers will be presented, how counter-offers will be negotiated, and whether a counter-offer will be accepted, are made by the buyer—not by the buyer's broker. (Adopted 05/01)

• When taking listings, explain to sellers that receiving multiple, competing offers is a possibility. Explain the various ways they may be dealt with (e.g., acceptance of the "best" offer; informing all potential purchasers that other offers are on the table and inviting them to make their best offer; countering one offer while putting the others to the side; countering one offer while rejecting the other offers, etc.).

Explain the pluses and minuses of each approach (patience may result in an even better offer; inviting each offeror to make their "best" offer may produce a better offer[s] than what is currently on the table—or may discourage offerors and result in their pursuing other properties).

Explain that your advice is just that and that your past experience cannot guarantee what a particular buyer may do.

Remember—and remind the seller—that the decisions are theirs to make—not yours, and that you are bound by their lawful and ethical instructions.

• When entering into buyer representation agreements, explain to buyers that you or your firm may represent more than one buyer-client, that more than one of your clients or your firm's clients may be interested in purchasing the same property, and how offers and counter-offers will be negotiated if that happens. (Adopted 05/01)

Explain the pluses and minuses of various negotiating strategies (that a "low" initial offer may result in the buyer purchasing the desired property at less than the listed price—or in another, higher offer from another buyer being accepted; that a full price offer may result in the buyer purchasing the desired property while paying more than the seller might have taken for the property, etc.). (Adopted 05/01)

Explain to the buyer that sellers are not bound by the Code of Ethics. Sellers, in multiple offers situations, are not prohibited from “shopping” offers. Real estate brokers may - unless prohibited by law or regulation - "shop" offers. Therefore, REALTORS® assisting purchasers in formulating purchase offers should advise those purchasers it is possible that the existence, terms and conditions of any offer they make may be disclosed to other purchasers by sellers or by sellers’ representatives except where such disclosure is prohibited by law or regulation. (adopted 05/05)

Remember—and remind the buyer—that the decisions are theirs to make—not yours, and that you are bound by their lawful and ethical instructions. (Adopted 05/01)

• If the possibility of multiple offers—and the various ways they might be dealt with—were not discussed with the seller when their property was listed and it becomes apparent that multiple offers may be (or have been) made, immediately explain the options and alternatives available to the sellers—and get direction from them.

• When representing sellers or buyers, be mindful of Standard of Practice 1-6's charge to ". . . submit offers and counter-offers objectively and as quickly as possible." (Revised 05/01)

• While the Code of Ethics does not expressly mandate "fairness" (given its inherent subjectivity), remember that the Preamble has long noted that ". . . REALTOR® has come to connote competency, fairness, and high integrity. . . ." If a seller directs you to advise offerors about the existence of other purchase offers, fairness dictates that all offerors or their representatives be so informed.

• Article 3 calls on REALTORS® to ". . . cooperate with other brokers except when cooperation is not in the client's best interest." Implicit in cooperation is forthright sharing of information related to cooperative transactions and potential cooperative transactions. Much of the frustration that occurs in multiple offer situations results from cooperating brokers being unaware of the status of offers they have procured. Listing brokers should make reasonable efforts to keep cooperating brokers informed. Similarly, buyer brokers should make reasonable efforts to keep listing brokers informed about the status of counter-offers their seller-clients have made. (Revised 05/01)

• Realize that in multiple offer situations only one offer will result in a sale and one (or more) potential purchasers will be disappointed that their offer was not accepted. While little can be done to assuage their disappointment, fair and honest treatment throughout the process; coupled with prompt, ongoing and open communication, will enhance the likelihood they will feel they were treated fairly and honestly. In this regard, ". . . REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, 'Whatsoever ye would that others should do to you, do ye even so to them.' " (from the Preamble to the Code of Ethics).

(Revised 05/05)

I use a form that makes all offerers aware that multiple offers have been received and you are advised to put your best offer forward.
If you offer every dime that you can or are willing to pay for the property, then that's all you can do.
Or, as far as disclosing numbers...
If seller's first offer was a decent one, seller will usually allow me to give out the number to beat.
If seller's first offer was low, I will normally just advise the other agent they are going to have to come closer to list.
None of these is deceptive or dishonest or lacking in fiduciary duties.
--A

" Make your VERY BEST offer" sums it up here.. I dont like being in the gray area,, and I dont like playing games. Make your best offer.. make it sweet for my seller.. and may the best Contract win!

This is what I do, because lately I have had multiple offers on almost all properties. I do not disclose to the buyers agent what any of the other offers are. In non-legal terms, give it your best shot and be prepared to walk away if you don't get it. I invite the second best offer to provide a back-up contract.

Wow! Thanks everyone. For some reason I was not getting notification of posts here and did not realize you were helping me.

As a whole the listing agent sets the price and sometimes out bids others to secure the listing.
So, when multiple offers come in and as a consequence bid up the price it seems somewhere in the mix a fraud has been perpetuated on the buyers, and the sellers and the listing agent? Is this not a form of bait and switch?

Noel,

The Seller sets their listing price hopefully based on good comps in the area provided by their agent. So tell us how do you outbid others to secure a listing other than lowering your commission?

Fraud on the buyers because of multiple offers? It is a very good thing you are retired casue you have no clue what you are talking about!

Ultimately, remember, the market sets the price.

A house that's over-priced is unlikely to sell because any good buyer's agent will probably inform the buyer that based on comps, the house is over-priced. I've seen listing agents get a listing by letting the seller hang a too-high price tag on the property, but usually it sits around on the market until the seller either withdraws the listing or drops the price. But if a seller insists on testing the market this way, that is his or her perogative, and it isn't necessarily the listing agent's fault. The listing agent may have advised them, based on comps, not to go so high. If he or she led the seller to believe that an inflated price was in the right ballpark, that's unethical.

Sellers and agents need to keep in mind, also, that the house has to appraise, or the bank will not finance that portion of that is over market value. That helps to keep folks honest and realistic, I think. But yes, I know, appraisers have been inflating values.