UPDATE: 2/13/13 - The Florida Association of Realtors said Bank of America will be issuing a "clarification email".
The recent Bank of America agent update that was emailed out today states:
Many MLS rules and even some State laws disallow keeping short sales "active" after the seller has accepted an offer. In Florida, the Florida Association of Realtors legal department states "a short sale contract is still a contract". In fact, my local MLS. the Emerald Coast Association of Realtors in Florida, states that even short sale properties that have "offers" (unsigned by the seller), that were sent to the short sale lender, must be removed from "active" MLS status, and placed into "pending" or "contingent" status.
When I initially read the email I thought it was accidentally sent to short sale agents instead of REO 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:
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I just got this email as well, and I agree Bank of America it seems IS overstepping it's bound because it does not own the property. The contingencies in the contract makes full disclosure that the contract is subject to approval by the lender. It seems they now want to control the operations of the MLS
Wendy, I just saw that. Once I wrap my Bank of America sale up- it will be my last one. This request is in violation of our local MLS regulations and state law. We are required to pend it once we have a short sale under contract (in central Virginia was do not have any other option other than active) or face a hefty fine. The short sale approval is a contingency. I'd also upset a lot of agents who show it thinking it is available!
Perhaps it is just hard for Bank of America to see the problem isn't with the real estate agents- it's the overinflated values they give to list properties at that makes no sense.
We need to pass this email to NAR and have them make their contact with BOA. This is a violation probably with the majority of the MLSs throughout the country. With ours, we have to mark it contingent or pending once we have the offer signed by all parties. I'm going to forward to my board so they can contact NAR.
Agreed. I have already forwarded it to mine.
Great idea, @Pam - this is unwise from Bank of America.
There is a difference between 'active in mls" and "active short sale." I think Bank of America means they don't want the listing to be stuck into PENDING or Temporarily off the Market. I read it to mean that "active short contingent" or "pending short lender approval" -- which are the two status modifiers we can use in our MLS -- is leaving it active in MLS.
But they are going a bit too far by trying to prohibit "cash offers only" as some properties are not suitable for financing and indeed are offered for sale as "cash offers only" because that's the only way they're gonna sell, duh, B of A!
Elizabeth - My MLS has "Contingent" or "Pending", we don't have "Active Pending". I either put mine in pending OR contingent depending on how solid it is, short sale or not. We rarely get back-up offers in my market. Their email clearly says "ACTIVE" status ,so they didn't put much forethought into this mass email.
I agree with you - "cash only" may certainly be appropriate in some cases, but that's YOUR business - you are the marketer of the property! And there is no way someone is going to tell me how to fill out my MLS fields. Good grief.
And what about condos in litigation that can only sell with a cash offer because no bank will touch them with a 10-foot pole? What does Bank of America say about advertising those as Cash Only? Or are they willing to take girls in trade or some other kind of commodity?
I am amazed that agents will believe that Bank of America can tell them what to do.
I agree with you completely. Cannot wait to see the revision.
I just sent a copy to the chairman of our MLS department as agents are going to say they have to keep properties active because Bank of America said so. What a bunch of rubbish! Bank of America has no business dictating rules to our MLS.
If anyone remembers the days when short sales were just getting popular, there were agents sending in multiple contracts and often when you called they would proudly say they had 12-13 offers going into the bank. Later when they got an approval letter they would call around as all their buyers had disappeared. When we wanted to show properties we had to call all the agents directly to see if they had contracts on the property already. It was a mess!
Now Bank of America wants it both ways. Why would a buyer put in a good offer and wait the 90-120 days it takes to do the short sale, knowing that someone could come in just before an approval and outbid them? The bank is going to get offers from buyers who are not committed to the property. Half the battle in doing a short sale is to find the buyer who is going to stick it out and wait for their property.
It would seem that if Bank of America wants higher and better offers then they should get out there and work with their customers to find a bank approved price. They should contact the 2nd lien holder and negotiate with them directly instead of making Realtors do it. They could hire contractors to get repair bids and pay for a title search to see if there are other liens they need to negotiate to get their short sale closed.
We all know that is never going to happen. Bank of America dictating rules to the Realtor MLS . . . well that is not going to happen either.
Karen - You explained this well. Those days were very difficult - like the Wild West of short sales! We don't need to see them again.
This is just part of the ongoing attempt by BofA (and others) to enter the Real Estate Brokerage business. I believe it is against the core MLS Rules from NAR and adopted by most all AORs.
It would will be interesting to see just what the consequences from BofA would be if we follow our local, State and National MLS Rules and didn't follow BofA's instructions regarding properties they do not own. Will BofA decline a Short Sale because it was placed into "Contingent", "Backup" or "Pending" after the OWNER has accepted a contract (contingent on short sale approval of course).
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