The recent Bank of America Short Sale agent update that was emailed out today states:

1. Your Bank of America short sale listing must be “marketed in the MLS” as ACTIVE until an approval letter is issued.
2. How you are to fill out your MLS fields in a general manner and specific manner.

Many MLS rules and even some State laws may disallow keeping short sales “active” on the market after the seller has accepted an offer. The Florida Association of Realtor says a short sale contract is still a contract. In fact, my local MLS. the Emerald Coast Association of Realtors in Florida, has a rule that even short sale properties that have “offers” (unsigned by the seller), that are sent to the short sale lender (don’t do that), must be removed from “active” MLS status, and placed into “pending” or “contingent” status.
When I initially read the email I thought it was intended for REO agents (where Bank of America is the seller), not short sale agents. I was mistaken. I think this latest effort by Bank of America is overstepping. Certainly, there are valid points, such as, it is wise not to state a short sale is “pre-approved”. But the email edict seems to also be micro-managing short sale agents and potentially is contrary to some State laws and MLS rules. The property is still owned by the seller. Third party “approval” does not equal “seller” status.
Here is the body of the email from Bank of America:

The post Bank of America Short Sale Policy – Trying to Control MLS? first appeared on Rulnick Realty.

Where do you get your data when you get a new listing?  Do you just cut and paste square footage, room sizes and school district from a previous sold or expired listing without verification?  One of my Destin buyer agents just ran into this.  She had written a contract on a short sale listing.  Her buyer was searching around on the internet and noticed the MLS property size was about 200 square feet higher than the Okaloosa Property Appraiser website. Of course, the property appraiser website could have been wrong, and there might have been a good explanation for the discrepancy.  If the seller had an appraisal, or finished rooms not reflected in public records, or measured the house, it could account for the difference.  That’s what we were hoping.  So my agent called the listing agent and asked, “Where did you get the square footage for this house?”  Answer: “Oh, I copied it from the old MLS listing.”

Excuse me? This is a huge mistake. Here are the ramifications of not performing due diligence on listing information:

1.   With a short sale, the inflated square footage might cause the short sale lender BPO to come in too high, losing the sale.

2.   The buyer’s appraiser will measure the home, come in at a lower value based on less square footage, and the buyer won’t be able to get funding and close.

3.   The buyer closes based one erroneous information, finds out about the error, and sues you later.

Those are just the problems I can come up with off the top of my head.  I am sure there are more.  You might think “Our MLS has a disclaimer that says the buyer is to verify all information”, so there is nothing to worry about.  Even if that’s the case, not performing due diligence can look like negligence.

The post Copying Old MLS Data? Not A Good Idea first appeared on Rulnick Realty.

Here is the new rule from the Emerald Coast Association of Realtors:

 “Further clarifying what a short sale listing in Active status represents, the Emerald Coast Association of REALTORS® Board of Directors tightened the MLS rules require a status change whenever an offer has been sent for lender approval or while additional offers are being collected. Listing agents are now required to pull a short sale listing while waiting for a response from a lender whether the seller has agreed to the potential buyer’s offer or not. The following wording was added to the Short Sale paragraph in Section 1.2, Note 3 on November 19, 2009:

When an offer is received on a Short Sale listing and that offer is not rejected by the seller within three business days of receipt by the listing brokerage or is sent to one or more lien holders for consideration, that listing may not be left in Active Status.If the seller has accepted the offer – whether or not it is subject to bank approval – the listing must be placed in Contingent or Pending Status. Otherwise, the listing must be Temporarily Withdrawn until all outstanding offers are rejected, the lien holder(s) agrees to the terms of the offer, or until the seller chooses to accept an offer.

The change will prevent several “loop holes” from keeping a listing on the market when offers are being collected by the seller or considered by a lender. Contrary to the belief of some MLS subscribers, most MLS Rules, this one included, may not be superseded by the desires of the seller or by agreement of the buyer and seller. The new rule goes into effect immediately.”

I think this is a good move, what say you?

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin Short Sales & Pre Foreclosure Help.

Destin Real Estate Blog

www.ShortSaleSuperstars.com for agents

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: [email protected]

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