Proper Use of Idaho’s RE-32 Multiple Counter Offer Form

Jason McCurdy

By Jason McCurdy

According to Idaho law, all agents have the obligation “to promote the best interest of the client in good faith, honesty and fair dealing.” (Idaho Code 54-2087 (4)). This obligation is twofold as listing agents are seeking a buyer for their sellers that will bring the best price, terms and conditions acceptable to them, while buyer agents are seeking properties their buyers can purchase with acceptable price, terms and conditions that meet their buyer’s requirements. One of most challenging times to meet these requirements is when a listed property results in multiple offers being submitted. As an agent, do you have the skills to handle this situation? Understanding how to properly use the RE-32 multiple counter offer form is essential in order for you to comply with the agency agreement you have established with your client.

Every listing presentation and buyer consultation should include a discussion with the client on how you plan to handle a multiple offer situation. This is where agents can determine if their client will be able to handle multiple offers or not. This is especially critical for listing agents. Some sellers will be able to handle negotiations of multiple offers one at a time and some will not. This goes for the agent as well. The RE-32 has been provided so that the agent and the client are protected from entering into more than one contract for the same property.

Another obligation an agent owes their clients is to “exercise reasonable skill and care.” (Idaho Code 54-2087 (2)). Listing agents need to pay close attention to this obligation in a multiple offer situation. The biggest factor when there are multiple offers is time. There is always a sense of urgency and good buyer agents reduce seller response time for strategic purposes. In order to handle this situation, a good listing agent should be patient and slow down. When you are a buyer, time is the enemy. If you are a seller you want all the time you can get. As the listing agent, sit back and assess each offer, check deadlines, terms, conditions, and prioritize which offers you and the seller feel are best, then work from there.

How many times have you represented a buyer, called on a listing to check on its availability, only to have the listing agent tell you there are multiple offers? More often than not, a buyer will not want to, or be advised not to, get into a multiple offer situation. This results in a lost opportunity for a listing agent to obtain an offer from that buyer. That breaks the agency law discussed above. Listing agents should use extreme care when determining if it is in the seller’s best interest to disclose whether or not there are multiple offers on the property.

When a listing agent has the skills to handle a multiple offer situation but the seller does not, the agent has the RE-32 to protect their seller. I cannot tell you how many times a listing agent has sent an RE-32 back to multiple buyer agents with the verbiage “buyer to make highest and best offer by…” This is not what the form is for. If a seller has instructed their agent to disclose there are multiple offers and wants to give each buyer a chance to “up” their offer there are a few ways to go about it. Using the RE-32 is not the way to do it. One option is to call each of the agents that have presented an offer and let them know that the seller has asked that each buyer submit their highest and best by a certain time or, the agent can draft a letter that the seller signs instructing the buyer to submit their highest and best by a certain time.

The proper way to use the RE-32 is to have the seller sign one RE-32 and present that one to each of the buyers with specific terms and conditions that the seller wants. The second way to use it is to create a separate RE-32 for each offer presented with the specific changes the seller wants to each of the offer. That way the seller can choose without consequence the highest offer with the best terms and conditions acceptable to them. Remember, the RE-32 is not used to instruct a buyer to submit their highest and best. It is an actual counter offer form and should include terms and conditions acceptable to the seller.

Jason McCurdy is a partner at Amherst Madison and the designated broker of Amherst Madison Partners. Jason began his real estate career in 2004 when he opened a brokerage with his mother. In 2013, Jason was given the opportunity to become the managing broker for the Boise franchise of the largest real estate company in the world. He managed over 500 agents through more than 10,000 transactions. He also resolved conflict and mentoring/coaching/training new agents, Jason loves to developing skills in others that provide them a strong foundation for success in the real estate industry.