How to Handle Bidding Wars Legally

Ultra-competitive housing markets have fueled bidding wars as buyers frantically compete for a limited number of homes for-sale. Real estate professionals are finding themselves helping their home-buying clients navigate multiple offer situations. But they must be careful to avoid misunderstandings and reduce the risk of discrimination in the process, too.

“Real estate professionals can help avoid complaints and fair housing issues while helping both the buyer and seller understand their options,” Deanne Rymarowicz, associate counsel at NAR, says in a new “Window to the Law” video posted at NAR.realtor.

Rymarowicz highlights three principles for real estate professionals to follow when navigating multiple offer situations:

Be mindful of your legal and ethical duties. Your state likely has laws and regulations regarding timeframes for presenting offers and what needs to be disclosed to the other party in a multiple offer situation. Some states, for example, prohibit revealing the terms of a buyer’s offer without the buyer’s consent. The REALTOR® Code of Ethics also speaks to handling multiple offer situations, such as requiring that REALTORS® “protect and promote the interest of their client” in multiple offer situations.

Watch for potential fair housing red flags. “Buyer love letters”—letters, videos, and photos given to the seller from the buyer expressing their desire for a home—could possibly lead to some fair housing violations. “These ‘love letters’ often innocently include personal information that reveals a prohibited basis for discrimination, such as ‘we can see our family celebrating Christmas around the fireplace’ or the ‘wide hallways will accommodate my wheelchair,” Rymarowicz says in the video. Fair housing centers on eliminating discriminating and “love letters” could potentially cause an implicit bias. “Accepting an offer based on anything other than the price, terms, and merits of the offer might violate fair housing law,” Rymarowicz says.

Let the client make the decision. Educate your client about multiple offers and strategies for responses. “You may even offer suggestion and advice based on your knowledge and experience,” Rymarowicz says. But ultimately, “it’s up to the client to decide what offers and counteroffers to negotiate, reject, and ultimately accept.”

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The Importance of the 2020 Census

Article I, Section 2 of the United States Constitution mandates that a census take place every 10 years in all 50 U.S. states, the District of Columbia and all U.S. territories.  The decennial census is a full population count of all individuals living in the United States in that given year. The first Census was taken in 1790, and this year—2020, the Census will take place again.

The Census is important because it ensures fair representation in Congress, aids with redistricting, and dictates funding for federal programs, including for schools and hospitals for states and localities throughout the country. Census data is also very significant for research purposes, including by NAR in its assessments of current and future housing needs, trends, and demands.

According to a recent George Washington University Institute of Public Policy report, titled “Counting for Dollars 2020: The Role of the Decennial Census in the Geographic Distribution of Federal Funds,” $1.5 trillion federal dollars are allocated annually to states and localities for various purposes and programs, including federal funding for libraries, schools, hospitals, roads, and other federal programs and services.

The Census is administered and managed by the U.S. Census Bureau, which is a bureau within the U.S. Department of Commerce.  The population count is conducted when households complete the American Community Survey, which asks the following:

  • The number of people living or staying in the home;
  • Whether the home is owned or rented;
  • The age, gender, and race of each person living in the home;
  • Information about particular ethnic groups that may be represented in the home; and
  • The relationship between each person living in the home.

The 2020 census can be completed by phone at 1-844-330-2020, by mail, or online at 2020census.gov until September 30, 2020. The physical survey that can be completed by mail will be offered in English and Spanish. The online and phone survey will be available in 12 languages. The Census Bureau will also provide print and video guides to answering the Census in 59 languages.

The census is important for all REALTORS® because completing the 2020 census means more resources for businesses and communities across the country. The data is also used for redistricting purposes and for reapportionment, to ensure fair representation in Congress. Last fall, NAR launched its Census Awareness Campaign to ensure that all 1.4 million REALTOR® members are informed about the upcoming census and to encourage all members to complete the 2020 census. Additionally, NAR has published an online Census Guide to help members, stakeholders, and state and local associations to learn more about the impact of the census.

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Safe Real Estate – All Year Round

We have all experienced increased levels of stress over the COVID-19 shutdown, quarantine, and the impact on the economy. People who are normally able to find healthy ways to relieve stress such as exercise, yoga, mediation, cooking, are beginning to suffer quarantine-fatigue. These same stressors have impacted the predators in our society and we have seen an increase in some violent crimes as a result. For New York, murder is up more than 23% year over year for the first 6 months and burglaries are up more than 46% in the same period. And we have already seen an increased attack upon REALTORS®.

We previously thought that crimes against agents were random or opportunistic street crimes. As a result, we have geared our safety classes toward awareness and not focused on predatory behavior. With rare exception, the crimes against agents we have seen reported are predatory in nature and fit the classic predatory behavior patterns.

It is important for real estate professionals to have an understanding of the primary types of predators likely to target our industry, as well as the criminal’s pathologies and patterns.

The University of Texas at Austin has researched the behavioral differences between predators and thieves. Predators are motivated by power and control and their goal is to identify signals of weakness or vulnerability and attempt to isolate you. Once isolated, the predators will exploit their victims, often physically and mentally to satisfy their need for domination over another person.

There are a few simple habits to build into your customer/client interactions that could help deter a predator by removing the signals they are looking and substituting strong signals that you are not an appropriate victim profile, from the initial inquiry and subsequent contacts.

The initial inquiry is the first opportunity for you to set the tone and expectations for how you will safely conduct your business.

By using the property information and a polite, but firm professional demeanor, you will be able to work with legitimate customers/clients and may deter a predator.

At the initial inquiry:

“Thank you for inquiring on 123 Main St. It is one of our most popular listings. This home has plenty of windows accenting the natural sunlight.”

  • Identify property information that increases street visibility to give the perception that others can easily see in from outside. This “passive surveillance” by the neighborhood can serve as a deterrent. By identifying that others may be interested in the property, you have also indicated that other showings or agents may also be at the property.

“Instead of meeting at your requested time of 5 pm, we will meet at 5:30 pm.”

  • Even though you know that the 5 pm request can be accommodated by changing the time establishes power and control.

“We will have 15 minutes at the showing as the sellers will be returning at 5:45 pm.”

  • By setting expectations that appointments will be scheduled with only brief periods alone, potential predators may be deterred because they will not be able to isolate for long and may be interrupted by the sellers returning early.

At the showing:

You should have an empowered greeting. Prior to COVID-19, I would suggest while standing on a porch step reach down to greet the purchaser. During COVID-19, a greeting that includes a strong head nod with good eye contact will serve the same purpose. Psychologically, to the predator, you are not appearing weak or vulnerable as they are forced to look up at you.

Also prior to COVID 19, I would suggest that your greeting should include a good firm handshake as it is a universal sign of strength and assuredness which will again remove any perception of being weak or vulnerable.

Knowing that the goal of the predator is to isolate you, you should always bring a buddy when:

  • The property is vacant
  • There is poor cell service at the property
  • You have an uncomfortable feeling prior to the appointment
  • You haven’t closed a deal in a while as you may be too eager to make a deal and ignore the voice inside your head that something may be wrong

Always screen clients and customers following your company’s safety policy or protocol.

Adding these simple habits to your real estate practice you can deter potential predators and increase your chances of getting home safe.

David Legaz, a retired NYPD Sergeant is the NAR REALTOR® Safety Advisory Committee Chair, the Education Chairperson for the Beverly Carter Foundation, and the 2020 President-elect for the NYS Association of REALTORS®. He also co-authored an agent safety book named, “Safe Selling: A Practical Guide for Preventing Crime without Sacrificing the Sale,” which can be downloaded at www.SafeSellingBook.com

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