A listing broker receives multiple offers on a property. The seller instructs the broker to only present offers from buyers who are pre-approved for a mortgage, and to disregard any cash offers or offers with financing contingencies. What is the listing broker's ethical and legal obligation under TRELA and agency law?
- APresent all offers to the seller, regardless of their instructions.
- BAdvise the seller that such a directive might violate fair housing laws and recommend presenting all offers.
- CFollow the seller's instructions, as the broker owes loyalty to the client.
- DOnly present the pre-approved offers, but document the seller's initial instructions.
Show answer & explanationAnswer & explanation
Correct answer: A. Present all offers to the seller, regardless of their instructions.
Under TRELA, a broker has a statutory duty to present all offers to their client unless expressly instructed otherwise by the client AND the client's instructions are not illegal. Disregarding cash offers or offers with financing contingencies, even if from pre-approved buyers, is not a lawful instruction for a broker to follow without potentially violating fair housing or other ethical duties related to presenting all offers. The broker must present ALL offers, as this instruction is not about specific terms but filtering based on offer type, which can be seen as limiting the seller's options and potentially discriminatory or against the seller's best interest if not fully understood.
Why the other options are wrong
- B. This instruction from the seller is not an automatic fair housing violation itself, but the broker's duty is to present all offers. While advising the client is good practice, the primary obligation is to present all offers.
- C. While loyalty is a duty, it does not override the duty to present all offers unless specific lawful instructions are given to *not* present certain offers, which is distinct from filtering offer types.
- D. Documenting is good, but the broker's primary duty is to present all offers, especially when the instructions are to 'disregard' certain types rather than a clear 'do not present' specific offers.
Broker's Duty to Present All Offers
A fundamental obligation under agency law and TRELA for a real estate broker to promptly present all offers, regardless of their terms, to their client, unless the client provides specific, lawful instructions otherwise.
- Applies to all written offers
- Must be prompt
- Only lawful and specific instructions can alter this duty
Memory trick: Every offer is a package: deliver them all, unless the law or clear, lawful client rules say no.