Banks, short sales, and MLS listings

If you list a short sale, and the lender involved instructs you to list it a certain way in the MLS, be sure you keep your local MLS rules in mind.

VAR recently heard from one of our member brokers that Bank of America was requiring this of agents: If you’re listing a short sale with a B of A mortgage, the property must be marketed as “active” on the MLS after contract ratification until a short sale approval letter is issued.

It’s all well and good to request that, but be aware that MLSs have different rules for inputting short sales, and that the Bank of America policy could cause agents to violate those rules.

When VAR heard about this, we immediately got in touch with NAR, which in turn reached out to Bank of America. NAR tells us that B of A was responsive, and  indicated it will revise what it asks of brokers so as not to make demands that violate MLS rules. (It doesn’t want to discourage potential offers, but it understands that Realtors must abide by MLS rules and the Code of Ethics.)

The CoE, you should recall, requires you to present a true picture in the representations you make, including those made through MLSs:

Article 12
Realtors shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.

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2 Responses to Banks, short sales, and MLS listings

  1. Greg Stiger says:

    Now, B of A has certainly proved that they lack Mensa level smarts-time and again they have proved it…HAMP and loan mod “lost paperwork” etc… but even they might have figured out that when a short sale listing is entered into the MLS and is marked “contract” 30 minutes later..well, someone MIGHT be trying to pull a fast one. Given the improvements in local markets, why would a bank with any smarts require that a short sale listing be exposed to the market for at least a week.Also, no double enders on a short sale.

  2. CIndy Jones says:

    BoA’s letter and then update to the letter regarding the MLS status change wasn’t well thought out and over-stepped their boundaries.

    Interestingly enough it promoted a conversation which suggest we even have conflicting information locally between VAR and MRIS. Accroding to information in a class led by Blake Hageman after a short sale is accepted by the seller the status should be changed to “contract.” MRIS rules state “the status for any listing where a ratified contract is subject to a lender approval must be changed to CNTG/KO or CNTG/NO KO, indicating a third-party approval contingency.”

    I agree with Greg that short sales should be required to be active for more than a minute in the MLS. There are currently 60 short sales under contract in PWC with less than 24 hours on the market. In a highly competitive market environment are those properties generating the best offer for the seller and the lender?

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