Short Sales
Short Sales are currently a very hot topic in real estate and in the ARMLS listings. In order to clear up any confusion over certain listing items related to Short Sale transactions ARMLS recently posted a document titled “Short Sale Policy”.
Many of these items have been hotly debated in a variety of forums, including special in ARMLS committees and at the Board of Directors. The listing policies of Short Sales had to be looked at in relation to the ARMLS Rules and Regulations and have been reviewed multiple times with the input of many members of the REALTOR® community.
Please make sure you read the “Short Sale Questions and Answers” either here Short Sale Policy (10-6-08 Property Features Updated), in the MLS system, or through Rules section in the Subscribers’ area of ARMLS.com. The Short Sale topics included cover: Status, Commission, List Price and required Property Features.
[…] a long time to come to engage members on a wide variety of issues as evidenced by recent posts on short sales and inappropriate words in remarks or […]
What are the chances that the MLS could add required entries 1. REO? (Yes/No) 2. Corporate/Bank Approval Required? (Yes/No) So that ALL searches could yield or exclude all REOs or Short Sales in the search results?
James,
In flexmls we have moved both Lender Owned and Corp/Lender Approval (as well as several other items) to a much more prominent spot in both the entry of the listing and where it will be displayed on the listing. That field is called Special Listing Conditions. Both Lender Owned and Short Sale listings are currently required and will continue to be required to use the corresponding selection in the system.
We realize that many many listing agents are not using the field. Some are putting the disclosure in the remarks and some are not putting anything at all. Whether is due to not knowing about the proper field to use or is due to willful neglect is most often not discernable. Hopefully the prominence of the placement of these fields, as well as through continued education of the subscribers will help to mitigate the problem.
That being said we do follow up on the violations that are reported, but with 1000 violations reported (roughly) each week, we do have a significant lag in enforcement from time to time. For the future I have been working on several inititives to automate several processes which should speed up enforcement on all issues.
Just to be clear. If a Bank Owned Property/Short Sale is listed, (TEMPO) and the disclosure is made in the remarks section, but the disclosure is not entered as Bank-Lender Owned or Corporate Approval Required in the Miscellaneous Field is that a Violation?
It seems that would be essential to make the field and data entered of use in both TEMPO and FlexMLS. After all one of the most important aspects of having that data entered is to be able to search to find or search to exclude REO/Short Sale Listings.
I just finished reading the Q/A on Short Sale Listings so I have the answer to the above. However I know of at least one agent who lists multiple (40+) properties that are bank owned and does not disclose via the miscellaneous Field (or remarks either) that the Property is Lender owned. Would it be possible to put into one of your blast notices, when you first logon to Tempo apop-up alert, stating that Short Sale Listings REQUIRE a Miscellaneous Field entry of “Corporate Approval Required” and Bank Owned/REO properties require a Miscellaneous Field entry of “Lender Owned Property”? This is an enforceable data entry and failure to comply is a Violation.
Please stop using not a short sale or not bank owned in the remarks. When looking for short sale or bank owned properties or trying to exclude them, it defeats the purpose of the remarks search engine. We need a area to check this.
Agreed! “not a short sale” or “lender owned” definitely has the opposite effect the agent intends, and causes extra screening for agent searches.
Holding judgment on searching without grids or area designations.
The changes sounds challenging but interesting! I look forward to experiencing it.
I sent an offer to a listing agent. it is a short sale. What is the correct procedure for the listing agent to do? Do they get the seller to accept pending the bank approval as per the short sale addendum? Or do they just send all offers to the bank? Upon Seller’s acceptance does the buyer’s agent open escrow? There is some confusion in our industry as to these matters. When you get multiple offers on a short sale is it suppose to be handled that same as any other multiple counter offer? Is there anything in our rules and regulations that give all the answers to these questions? I am getting listing agents telling me that they will not allow their sellers to accept offers and they just send them to the bank.
Jerri,
According to the rules all offers must be presented by the listing agent/broker to the seller (owner of the home, not the bank in this case). Beyond that the Rules and Regulations and Short Sale Q & A does not address how to go about handling the day to day proceedures that brokers and agents should use when making offers on short sales. I would suggest that you seek out other agents with experience in both the seller and the buyer side of short sale transactions.
With regard to your last statement about agents not having their sellers accept offers and just sending the offers to the bank. That is an individual decision by each list agent/broker. I would suspect that it has to do with the listing status requirements put forth in the Short Sale Q & A.
i have a question about short sales proceedings. when multiple offers are made on a short sale property, is it handeled on a first come first served basis. my situation is that i made an offer on a short sale and it was accepted by the seller. another offer was made on the same property, but was not accepted by the seller to my knowledge and i was told it was just a “back up” offer and was assured that my offer would be entertained first. both offers were submitted to the bank for approval and i received an email today from the sellers agent that we will hear from the bank on monday as to which offer they will accept. are they obligated to entertain my offer first or will the bank look at both offers and make a decision?
Francis - ARMLS has no say in how the offers are looked at. What you have described seems to be the typical way offers are handled by the seller and subsequently the bank. Even if they did have to technically deal with your offer first, but the second offer is better, they would just turn your offer down (first) and accept the second.
After personally touring over 250 houses in the last six months, and talking to at lest 50 agents, i have come to realize that wuite a few are disingenuous at the least regarding their listings. Many times the information they have provided on MLS is flat wrong. They talk at length about their client, making wildly false statements without regard for the fact that I would actually check things out. On more that a few occasions agents stated the house is not bank owned, only for me to find out it is. They also like to say that it isn’t a flip, when it is obvious it is.
Why does this all matter?
Well, my suggestion is that if you run across listings that have false information, or where the agent is being less than honest about the property, you should post it on the MLS website. By self-policing, it will sure make everyone behave in a professional manner. Otherwise they may end up being put out there in a bad light and that will hurt their business.
Regarding Short Sales, lenders are commonly refusing to pay more than 5% commission in most instances. If the lender reduces the allowed commission paid from the sellers proceeds (which is the total sales price), then we need a way to let buyers agents know that the total commissions reduced will be shared by sellers and buyers agents. Right now, if the lender approves a deal with a 3% commission, and the listing broker has offered 3% to the selling broker, then the listing broker will get nothing. The listing broker cannot find out in advance how much the bank will be willing to pay. Fair is Fair! No one is trying to get over on another agent who also works very hard for their money, but why should the listing broker be exposed to the whims of the bank? If the deal is approved, sans commissions, agents are not allowed to let commissions get in the way of closing, so everyone could, technically, work for free because the bank knows we can’t take a position on this.
If the MLS had an option to disclose this on the listing, it could save a lot of headache. Come on!
Please make it clear that if the lister would enter the “Short Sale Approval Required” selection under Special Listing Conditions, it would be very helpful to those of us who are sending listings out automatically to clients who will have a short time to find a home, get their loan approved, and close on a property. We do NOT want our clients automatically receiving short sale listings when they are relocation clients with a week window in which to find a home, or have to move by a certain deadline. Also, they should NOT say “Not a short sale” in the remarks, since some agents are forced to exclude those words in the remarks from their searches because some agents don’t use the “Short Sale Approval Required” selection!