Once a contract is ratified, the listing status must be changed in MRIS to reflect the actual status. Some agents are using the CNTG/KO. That’s fine, so long as the kick-out clause addendum is used and it is very clear that the property does have a kick-out and all parties understand what that means and how it will be enforced. A listing cannot be “Active” in MRIS, if the contract is ratified.
Here is what MRIS has to say:
“Short Sales” have become the subject of great discussion and debate among practitioners, regulators, and policymakers alike. With input and guidance from the MRIS Board of Directors, the MRIS Compliance Committee, the REALTOR® Shareholder Associations and the MRIS subscribers, and taking into consideration the new policy changes approved by NAR at this year’s mid-year conference, MRIS is updating its policies related to Short Sales. The goal is to provide a balanced approach that addresses issues on both the seller and buyer sides of transaction.
There are several points that MRIS subscribers will need to consider:
Definition of Short Sale. MRIS is adopting the definition of “short sale” established by NAR: “As used in MLS rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.”
Definition of Potential Short Sale. A potential short sale describes a property that may reasonably be expected to become subject to a short sale. Going forward, MRIS’s new policy is that all Potential Short Sale listings must be disclosed unless local laws require otherwise. The potential for a short sale is considered a material fact.
Lender Approval. Seeking lender approval is part and parcel of the typical short sale transaction.
The bottom line: If lender approval is to be sought in a transaction, then this fact must be disclosed to the potential buyer and buyer’s agent unless local laws require otherwise. It is your responsibility to properly determine what your legal obligations are, and to act in accordance with these obligations.
Compensation Data Field. Since only listings with unconditional offers of compensation may be entered in MRIS, the compensation entered in the compensation field is the compensation that any cooperating broker should expect to be paid as result of the sale.
MRIS will continue to treat commission related issues and disputes as the purview of the arbitration panel of the appropriate local Realtor® Association. MRIS is not a party to any short sale transaction or compensation agreement, and will not adjudicate compensation related disputes among subscribers.
Appropriate status. 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. MRIS’s perspective is that a listing broker, in such an instance, may continue to market the property and continue to accept back-up offers. The MRIS Rules and Regulations require that the listing’s status be changed within 48 hours excluding weekends and holidays.
Please refer to the Short Sale FAQ at http://www.mris.com/compliance/faq.cfm for more information.
Note: Virginia considers the pursuance of a short sale as a confidential financial fact and thus cannot be disclosed in MLS or anywhere else without the written permission of the Sellers.
The Virginia Administrative Code also addresses this issue:
3. All online listings advertised must be kept current and consistent as follows:
a. Online listing information must be consistent with the property description and actual status of the listing. The licensee shall update in a timely manner material changes to the listing status authorized by the seller or property description when the licensee controls the online site.
b. The licensee shall make timely written requests for updates reflecting material changes to the listing status or property descriptions when a third party online listing service controls the website displaying the listing information.
c. All listing information shall indicate in a readily visible manner the date that the listing information shown was last updated.
