Frequently the question arises: “Can we leave it as active in MLS, if the transaction is contingent on Third Party Approval?”

The governing entities dictate the answer- MRIS policy, the REALTOR® Code of Ethics, the Virginia law and the contractual agreement. The contractual agreement has little to do with leaving the listing “Active” it simply dictates which policy is triggered.

At the heart of the matter is the answer to the question, is there a ratified contract? The Virginia Statute of Frauds requires that residential sales contracts be reduced to writing, in order to be enforceable. Just as a reminder: the elements of a ratified contract are (1) offer & acceptance, (2) consideration, (3) legally competent parties, (4) consent and legal purpose. An offer is not considered ratified until the other party has been notified. The parties need to agree first, then sign the contract and finally deliver the signed contract to the other side of the transaction.

The Regional Contract defines “ratification” as “Date of Ratification means the date of final acceptance in writing of all terms of the Contract (not the date of expiration or removal of contingencies).”

Also reference paragraph 1 and 2 of the Virginia Jurisdictional Addendum. The contract makes it clear, that signatures and delivery convey a meeting of the minds and therefore a ratified contract.

Acceptance by the Lender in a Short Sale is simply a contingency and does not affect ratification. Remember that some companies are using “subject to” clauses which delay ratification until lender approval. Since these contracts are not truly ratified; the buyer may keep looking for better deals at better prices and the Seller may still keep looking for better Buyers. Both Buyers and Sellers should be very clear, when deciding not to ratify, that either party may bump them from the “deal”.