In a 2009 issue of REALTOR® Magazine, columnist and former chair of NAR's Professional Standards Committee, Bruce Aydt does a fine job of helping readers understand When the offer is "accepted" in a short sale situation.  He states, "Many MLS (Multiple Listing Service) systems require listing brokers to change a listing out of active status upon the acceptance of any offer - including offers subject to lender approval, as in a short sale.  Whether, and when, the listing status must be changed is a matter of MLS rules.  (We'll revisit this in more detail.)

Bruce goes on to say, "Regardless of what the MLS requires, the Code of Ethics Standard of Practice 3-6 requires that accepted offers be disclosed:  'REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.'  Even if your MLS doesn't require the listing to be reclassified as "pending" or "under contract" upon acceptance of an offer in a short sale, if a cooperating broker contacts you (an Agent or Broker) about showing that listing to a prospect, you're required to disclose the accepted offer.

So, how does this relate to the Regional Multiple Listing Service of Minnesota (RMLS)? And, why is this important.  Recently, I had a very pleasant and informative conversation with Hugh Trimble, Rules and Regulations Administrator for the RMLS.  He agrees that disclosure must occur when an offer has been accepted in a short sale situation, that is a Seller, the legal property owner, accepts an offer.   The Agent or Broker representing the Seller can  adhere to the required disclosure by simply changing the status of the listing from active to pending or TNAS (Temporarily Not Available to Show).  Or, if the Seller would like to accept back up offers, Their Agent may proactively disclose this in the Agent remarks of the MLS listing, or when fielding inquiries from a prospective Buyer or Agent.  Regardless, disclosure of the offer must be done prior to the scheduling of, or showing of, the property.  Failure to disclose an accepted offer results in a fine.  Why is this important to Real Estate Agent's?  Why is this important to their client's?

From an Agent's perspective this can negatively impact her time, money, and credibility amongst client's and peers. 

It shoud be noted that 46% of our markets transactions are lender mediated properties, that is short sales or foreclosures.  Some segments of our market may be higher or lower. This would depend on a number of factors, such as, price, style, location, and beyond.  So, let's take a look at a likely scenario based on the above statistic. 

An Agent schedules 10 homes for showing through an automated service, i.e., Showing Solutions or Book A Showing.  To be conservative, say 3 of 10 of these properties (vs. 4.6) are in a lender mediated situation.  The Agent who is charged with scheduling these showings considers the aforementioned criteria, price, style, and location, as well as, their clients specific criteria, property availability, time, and other important factors.  Imagine piecing together a puzzle and in the end finding out that your missing 3o of the 100 pieces.   The Agent must start the process over and find suitable properties to fill in the now vacant time slots.  This can result in, adjustments in scheduling, duplication of efforts, and possibly having to explain to their client that the favorite property they were so anxious to see is no longer available.  All because the accepted offer was not proactively disclosed prior to scheduling the showing.   Rather, upon notice of the appointment confirmation, a note accompanies the notice that reads,  'Oh by the way, this property has an accepted offer with multiple back up offers.  All future offers will be back up only!' 

How does all of this look from a client's perspective.  Here are a half dozen potential client thoughts to get you started:

1.  My Agent is not as organized as she said she was.
2.  My Agent did not do her home work.  ABR®, Right!
3.  My Agent should have known this property was not available.  How could she not know this information?
4.  My Agent is  unprepared and a poor manager of time.
5.  My Agent keeps changing the schedule! What a pain!  This isn't making the process of finding a home as smooth as possible as she had promised me. 
6.  Get your head out of your ...  You get the message. 

In short, whether you are a Broker or an Agent, please recognize the negative impact this one missed step can have on our individual businesses, industry, economy, and client perspective.   Clients and prospective clients, please do not let the actions of some shape your perception of all.

Steve M. Albers, REALTOR®, ABR®, CDPE©
Stephenson & Albers
Real Estate Team
RE/MAX Results
(763) 229-9067  Mobile
 steve@stevealbers.com
avenuesandacres.com
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