Offers and Counter Offers
Does this sound familiar?
You see an open house on the weekend, offers are due on Tuesday, your agent submits yours right before the deadline and 24 hours later you get back a "Seller Multiple Counter Offer" asking for your best and final price.
Or maybe you make a low ball offer on a property that has been on the market for quite a while and then the seller responds on a SMCO form.
I see it happen all the time and often my buyer clients will ask how we know that the seller really has multiple offers. Great question so let's talk about it.
To start with, it would be the textbook definition of fraud if a seller and listing agent used the SMCO form to respond when there really were no other offers on the table.
One definition of fraud is "wrongful deception intended to result in financial gain". If a seller uses the multiple offer form and that induces a buyer to pay more because they believe there to be more competition, well there you go: deception and financial gain. Proving this can be more difficult but the damages should be clear - the difference between what you may have paid and the final purchase price.
Has this every happened? Not that I know of but it would not surprise me. My personal opinion is that an agent who would mislead a buyer is violating ethics statutes as well as committing fraud. Please note - listing agents have no obligation to disclose other offers or how many.
Other Terms of the SMCO
Here's how the SMCO form and the normal counter offer form differ.
If you are the only buyer and the counter offer form is used by the seller, once you sign it you have a deal. The seller is selling you the house assuming you perform and can get a loan.
With the SMCO the seller is free to accept your offer or any other that responds. It also allows the seller to ask for a "best and final" which really can't be done with a single counter offer.