An agent receives two offers on a property simultaneously. What is their correct course of action?

Q: What is the correct answer to: An agent receives two offers on a property simultaneously. What is their correct course of action?

The correct answer is Present both offers to the vendor immediately. Option B is correct because agents have a fiduciary duty to present all offers to their principal immediately and without bias. Under Australian Consumer Law and state legislation governing real estate practice, agents must act in the vendor's best interests by providing complete information. The vendor has the legal right to consider all offers and make informed decisions about which to accept, reject, or negotiate. Withholding any offer would breach the agent's duty of disclosure.

Q: What background knowledge is needed for this Agency Practice question?

Real estate agents in Australia operate under strict fiduciary duties to their principals (vendors). These duties include loyalty, disclosure, confidentiality, and acting in the principal's best interests. The Property and Stock Agents Act (varying by state) and Australian Consumer Law establish that agents must present all offers promptly and without filtering. Agents are intermediaries, not decision-makers, unless granted specific authority. The Torrens title system ensures clear ownership, while PEXA facilitates electronic property settlements. Breach of fiduciary duties can result in disciplinary action, licence suspension, and legal liability.

Q: What is a good way to remember the answer to this Agency Practice question?

PRESENT: Present Rapidly Every Single Tender. Like a waiter who must present the entire menu to customers rather than hiding options they think customers won't like, agents must present all offers to vendors immediately. The vendor is the 'customer' who deserves to see every 'menu item' (offer) available. When you see questions about multiple offers, remember PRESENT - the agent must present all offers rapidly to the vendor. Don't get distracted by offer amounts, timing, or the agent's opinions about which is better.

Q: What exam tip applies to this Agency Practice question?

Look for keywords like 'fiduciary duty', 'all offers', and 'vendor's right to know'. The correct answer will always involve immediate, complete disclosure to the principal without the agent making filtering decisions.

Q: How does this Agency Practice concept apply in Australian real estate practice?

A listing agent receives a $500,000 cash offer at 9am and a $480,000 offer with conditions at 9:15am on the same property. Despite the second offer being lower and conditional, the agent must immediately contact the vendor and present both offers with full details. The vendor might prefer the certainty of the lower cash offer or choose to negotiate with the higher conditional offer. This decision belongs solely to the vendor, and withholding either offer would breach the agent's fiduciary duties.

Question

Agency PracticeFiduciary DutiesEASY

An agent receives two offers on a property simultaneously. What is their correct course of action?

Answer Options

A

Present only the higher offer to avoid confusion

B

Present both offers to the vendor immediately

C

Negotiate with both buyers to increase their offers first

D

Accept the first offer received chronologically