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As an accomplished author and attorney in the real estate industry, not to mention more than twenty years leading the association, CEO of Arizona REALTORS® Michelle Lind always invites members to send her the burning questions they have but were afraid to ask!

Featured Question

The Residential Real Estate Contract has an area for a Seller to Reject offers. It has always been my practice to provide the Buyer’s Agent with a copy of the Seller Rejected Contract. A year ago, I moved to a part of the state where the practice of returning Rejected Offers is not common practice.

I was in a meeting with Commissioner Judy Lowe who said as the Auditors are reviewing rejected offers if a Buyer’s Agent does not receive the Rejected Offer from the Listing Agent to keep a copy of an email requesting a copy.

I was also in a class where the instructor said that the Seller was not required to initial the Rejected Area of the Contract. Can you provide some clarification on this issue?

MICHELLE’S RESPONSE: To help real estate licensees avoid allegations that an offer was not submitted to the seller or not provided in a timely manner, the Arizona REALTORS® added a box to the contract to prompt the seller to acknowledge that an offer was submitted and rejected on the date specified. The seller’s initials evidence that both the listing broker and the buyer’s broker complied with the Arizona Department of Real Estate (ADRE) Rules. 

Additionally, to help clarify the ethical requirements within the Code of Ethics, Standard of Practice, the National Association of REALTORS® revised section 1-7 to require: 

Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide, as soon as practical, a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/ landlord has waived the obligation to have the offer presented.

The rationale for this addition to the Code of Ethics is that it benefits the listing brokers by confirming their ethical duty to present offers consistent with the other provisions of Standard of Practice 1-7, and it benefits cooperating brokers by affording them written confirmation of offer presentation to provide to their buyers.

However, the instructor was correct that generally speaking, a seller has no legal obligation to respond to an offer, and the offer expires if not accepted by the deadline set forth in the Residential Purchase Contract. 

By statute, real estate brokers must maintain copies of all rejected offers for a one-year period. See A.R.S.§32.2151.02(I). To comply with this statute, the buyer’s broker must maintain a copy of the unaccepted offer they submitted on the buyer’s behalf for a one-year period. 

If the buyer’s broker is unable to obtain the rejected offer initial by the seller, a buyer’s broker may want to consider maintaining a copy of the request to the listing agent for the rejected offer with the seller’s initials or a written affirmation from the listing agent that the offer was submitted and rejected to address any questions that may arise from the buyer, in an ADRE audit, or a Professional Standards complaint. 

K. Michelle Lind is an attorney and the Chief Executive Officer for the Arizona Association of REALTORS®, the largest trade association in Arizona, representing approximately 50,000 members. She is the author of Arizona Real Estate: A Professional’s Guide to Law & Practice.

This post is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.