The topic of ‘multiple offers’ is what we will be discussing in this installment of the CIREBA President’s blog.
There is, perhaps, nothing more potentially frustrating for Purchasers and Vendors than dealing with and negotiating multiple offers. These situations are often fraught with misunderstandings and competing offers oftentimes result in missed opportunities. Core to the multiple offers situation is the fact that both buyers and sellers must appreciate that in these instances typically only one offer will result in a sale. The other would-be purchasers, then, will often be disappointed that their offer was not accepted. While in many cases little can be done to lessen this disenchantment - it is important for us as real estate professionals to be fair and honest throughout the process and continually promote open communication and trustworthiness.
Recently CIREBA members have been confronted with an increasing number of multiple offer situations. We feel that this is solid proof that the real estate market is improving and that we are seeing the beginnings of a “seller’s market” here in the Cayman Islands. This happenstance could also very well be an indicator that real estate island-wide, not just on 7 Mile beach and in Cayman Kai, is on an upward trend. Case in point, a recent property that came to market had 10 different offers from 10 different CIREBA members!
Along these lines - I feel that it is more important than ever to explain to all parties involved in property transactions that here in the Cayman Islands, unlike many other places in the world, the fiduciary duty of the real estate agent is with the Vendor. This is the case whether the agent is representing the Vendor or the Purchaser. This also does not negate our responsibility to act in a fair and honest way with the purchasing party. Our CIREBA Code of Ethics obliges us to be so with all of the parties involved in the property transaction.
To assist the association’s membership, the Board of Directors are in the final stages of adding to our Rules and Regulations new procedures to deal with multiple offer situations. Generally, these new regulations will include instruction that once a listing receives more than two offers, and before being accepted by a Vendor, the listing agent will notify all parties that they are in a bona fide multiple offer situation. The agents will then be given a future date and time for each of their customers to present their “best offer”. These offers must be sealed and presented to the CIREBA office. The listing agent along with the CIREBA manager will open each offer and make a copy of it to be kept at the CIREBA office in the event of a future dispute. The listing agent will then take the offers and present them to the Vendor for them to decide on which (if any) will be accepted. Each agent will then be notified of the decision within a short period of time. The main goal of this new procedure is to fairly complete the process and to have all the involved parties get a fair and honest opportunity to purchase the property.
Multiple offer situations can be challenging. This does not mean that they cannot be successful and positive experiences. Through the promotion of open dialogue, transparency and fairness there is no reason why deals cannot be struck and the individuals involved in these deals cannot walk away feeling that they were treated fairly. It is my hope that with the market trending upward, and with these new CIREBA regulations to act as a guide, that everyone can negotiate a multiple-offer situation into a successful real estate transaction.