Offer Instructions and Conditions

The PAR Legal Hotline attorneys have talked to a number of you with variations of questions surrounding offer instructions or conditions, all of which basically boil down to “Can the seller side set conditions or instructions for offers?” and “Does the buyer side have to follow conditions or instructions that are conveyed?”  

The answer to most of those questions, of course, is “it depends.” But this is very much a “proceed with caution” situation that will depend heavily on context and details. This article covers some common concepts and scenarios, but be sure to check with your broker/manager for questions about specific transactional concerns. 

Setting Conditions or Instructions 

In general, a seller can set certain offer criteria based on their wants and needs. For example, if a seller has specific timing issues around when they are willing to vacate the property (e.g., not until after the end of a school year, or until their new home is built), they could tell buyers that they want that timeline reflected in any offers and that they’re not likely to accept an offer that doesn’t meet this criteria.  

What about the listing broker’s wants and needs? Can the listing agent or broker set certain offer criteria based on their business preferences or brokerage policies? The answer is maybe.  

While listing brokers may have certain established business preferences or internal operational rules, they should not pose them as a requirement without client input and consent. For example, let’s say a listing agent has gotten burned by buyers who get offers accepted and then walk away from the transaction without making their deposit. To combat this, the listing agent adds to the listing information, “All offers must include a certified check in the amount of the proposed deposit.” 

That might be a great idea, and it could be helpful to their seller clients. But it also might reduce the pool of potential buyers and could require a change to the default language in the Agreement of Sale. The listing agent could certainly explain this suggestion to the seller and seek their approval to include it as an instruction, but the agent should not unilaterally dictate an otherwise negotiable contract term on behalf of their client without that discussion and permission. 

Conditions vs. Contracts 

A number of our hotline questions involve conditions/instructions that are expressed to buyers in some way, but that require amended contract language to actually implement. Many relate to when initial deposits are accepted and/or how they are provided (e.g., brokers that don’t want to accept personal checks, only want wired funds, don’t want wired funds, etc.). 

Remember that default language about the format of payment is already part of the PAR Agreement of Sale, so if a seller and listing broker want to change those terms, the actual words of the contract will need to be changed (and initialed and dated) in order for the expressed preference to be binding. Or to put it another way, if the listing agent says “No personal checks” in the MLS but no one updates the Agreement, a buyer still has the contractual right to submit their initial deposit by personal check if it’s more than 30 days before the proposed closing date. 

Similarly, sellers will often include language asking for post-settlement possession or making notes about proposed personal property inclusions or exclusions that differ from what’s in the default language. If those terms are not included in the actual Agreement by amendment or addendum, they are not magically binding just because they were noted in the MLS. 

A Note on Regional Practices 

If you’ve been practicing in a certain marketplace for a certain amount of time, certain norms and common practices can start to feel like they are mandatory. For example, in some areas of southeastern Pennsylvania, it is very common to use the Buyer’s Financial Information Sheet (PAR Form BFI), which provides the seller with a picture of the buyer’s financial assets and liabilities. It’s not uncommon for listing agents to present Form BFI as a “requirement,” though there is no legal requirement to provide that information. If a buyer agent is presented with certain items as “required” conditions or instructions, it’s okay to ask whether it’s based on some legal or contractual rule, a client instruction or a brokerage policy … or if maybe it’s just “the thing we do around here.” As a listing agent, make sure you can accurately answer that question, as there could be disciplinary concerns if you present certain things as “requirements” that are not. 

Buyer Options – Following Instructions 

Buyers have discretion on whether or not they follow the conditions or instructions that are provided. For example, a buyer could refuse to accept modified contract language that limits deposits to wired funds, as they can choose what to include in their offer. That said, if it’s important to the seller, that refusal may substantially diminish the chances that their offer is accepted. Just like with any other contract terms, buyers should make the offer they want to make, and sellers should review it based on criteria that make sense to them. 

Presenting Offers 

What happens if offer instructions are published by the listing agent, but the offer that comes in does not follow them? Well, an offer is an offer. The Code of Ethics and Section 606.1 of RELRA require all Realtors® to present offers in a timely manner, unless the property is already under contract and a written waiver has been provided by the client. The PAR Listing Contract (Form XLS) contains this limited written waiver, but it is NOT a waiver that says listing brokers don’t have to present offers that don’t have terms the seller asked to be included in the final contract.  

If there is a concern that a buyer’s offer may not be presented to the seller, a buyer agent can transmit a Broker’s Request for Affirmation (PAR Form BRFA). The Code of Ethics says that a Realtor® who is asked (in writing) to affirm the submission of an offer must respond (also in writing) to say whether it was or it wasn’t held back because of a specific waiver.