Happy Holidays! I am pleased to report that the MLS Board of Directors, after requests from members, has amended the MLS Rule concerning the status of a short sale. Previously the MLS Rule required a status of “Pending” when the Seller accepted an offer where Standard Form 2A14-T “SHORT SALE ADDENDUM” was included with offer. The Board modified the Rule to require a status change of “Active-Contingent.” The modified MLS Rule 2.5 is printed at the bottom of this post.

If you have a Pending “Short Sale” listing, please modify the status to Active Contingent.

During the discussion, the Board heard that some listing agents are not advising the seller to accept any offer(s) but rather are sending the offer(s) to the lienholder to determine whether the lienholder would agree to the terms of the offer.

You should consult legal counsel about this practice and insure that the Seller and Buyer have informed consent about the difference between sending a contract or sending just the offer to the lienholder. Note: Many lienholders will not respond to an offer; they do respond to a contract.

Your Association has created a Best Practices: Short Sale paper to help listing agents, buyer agents and Brokers-In-Charge. I urge you to Click Here & read it.

Section 2.5 Reporting “Pending” And Sold Sales to The Service: Status changes, including final closing of sales, shall be reported to the Multiple Listing Service by the listing broker within one (1) business day after they have occurred. If the negotiations were carried on under Section 2 (a) or (b) hereof the cooperating broker shall report accepted offers to the listing broker within one (1) business day after occurrence and the listing broker shall report them to the MLS within 24 hours after receiving notice from the cooperating broker (See MLS BofD Minutes 05-19-08; See MLS BofD Minutes 09-18-08).

The listing Participant must report any pending sale subject to a contingency according to the following requirements:

a) If the contract is contingent upon the buyer selling a property not currently under contract, the status changes to Active Contingent  and subsections (b) and (c) of this Section 2.5 shall not apply; or
b) If the contract created by the parties uses Alternative 2 of the NCAR/NCBA Standard Form 2, the status remains Active Alternative 2 and subsection (c) of this Section 2.5 shall not apply; or
c) If the contract created by the parties uses Standard Form 2A14-T Short Sale Addendum, the status changes to Active Contingent and subsections (d) shall not apply (see MLS BofD Minutes 12-17-09); or
d) The status of the listing must be changed to “Pending” (See MLS BofD Minutes 04-19-07)