Foreclosure in Tacoma>Question Details

Kelly Vaughn, Home Buyer in Tacoma, WA

What are the legal consequences if a real estate office refuses to change the status of a short sale to?

Asked by Kelly Vaughn, Tacoma, WA Wed Apr 9, 2008

pending or sti after a purchase and sale agreement have been executed?

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Kelly, the whole matter of short sales is in a state of change within NWMLS right now. A new addendum has just been released while will allow buyer and seller to negotiate the status of the listing and the seller's ability to accept additional offers. A rules change was just mailed out to all NWMLS brokers which changes how we comply with this issue. Your agent should be able to advise you. These things are a real nightmare for buyers. Of course, if it goes through, you'll probably get a great buy. Be patient.
2 votes Thank Flag Link Wed Apr 9, 2008
Further to Don's comment below, that change which is now completed generally only gives the option of Pending or Pending Backup and that is part of the contract if the addendum is attached. There was a verey odd time, and I totally agree with the questioner, when they will showing as Active. It may take a little time for all agents to catch up with the new rule that replaced the last new rule.

For agents, look up Rule 120 which indicates the Status should be Pending or Pending BU and NOT actively for sale.
0 votes Thank Flag Link Tue Apr 15, 2008
I am going to have to disagree some of my peers below. This is not taken lightly. If you feel that your agent is not responding you have a couple of options. First, I would try and contact the broker of the agent representing you. If that fails you can always contact the MLS directly. Most agents will respond quickly to that threat. They tend to act swiftly and with fairly serious reprocustions. None of us want to deal with that. I will as I have seen below attache the most recent mls note on this issue. Feel free to contact me if you have any further questions.

Legal Bulletin 169 addresses Short Sales. In particular it states in section 5

5. Rule 120. Rule 120 requires the listing office to give notice of sale by changing the status of the property after a purchase and sale agreement is executed. The existence of a right to review the agreement by the lender does not affect this obligation. A contingency allowing the lender to review the agreement is no different than any other agreement, and if the parties have reached mutual acceptance, the property is under contract. The status must be changed to Pending, or Pending BU no later than 5:00 p.m. of the next business day.

Hence if a Short Sale listing has a signed P&S agreement waiting on Lender approval then this listing must be changed to either Pending or Pending BU by 5.00pm the next day.


Thanks for the question.

Danny Altizer
Windermere RE South Inc.
253.250.6474
dannya@windermere.com
0 votes Thank Flag Link Thu Apr 10, 2008
As far as I know, the status change is regulated by the NWMLS rules. I am not aware of any legal consequences, but there could be fines assessed through the NWMLS. Below is the rule from the Northwest Multiple Listing Service.
Listing Office Duties. The listing office must give notice of sale to NWMLS on NWMLS Status Report Form on all listings in NWMLS. Notice must be delivered to NWMLS’s office or be input by the listing office not later than 5:00 PM of the next business day following receipt of the copy of the Purchase and Sale Agreement from the selling office. The listing office may, in its discretion, give such notice following the telephone notice from the selling office without awaiting receipt of the Purchase and Sale Agreement. Notice of sale and notice of sale subject to inspection (“STI”) must be input or delivered to NWMLS within the above time limit. Listings sold “STI” will remain active in NWMLS’s database until the condition is satisfied or waived, at which time the listing office must input the listing as “pending” by 5:00 PM of the following business day.
0 votes Thank Flag Link Wed Apr 9, 2008
While it is possible there could be different laws in WA than elsewhere, I suspect that it is the same in WA as elsewhere. I am not familiar with any state that has a legal requirement to change the status. The database to which you refer is the MLS?? . Many MLSs have rules that govern the members and require reporting a status change. This however, is not a "legal" requirement; it is a data integrity requirement. The MLS was created as a system for brokers to share information with other brokers so they could bring buyers and sellers together. The data integrity rule was created so that a buyer agent knew whether or not they should bring forth their buyer client.

A seller has the legal right to continue to market their property, but cannot legally enter into two contracts, since he/she only has one property to sell. Many sellers do continue to market for back up and fully disclose that showings are for back up purposes. In particular, if there is a sale contingency, a buyer has failed to deliver deposits or mortgage approvals, you will see sellers continue to market. In the case of a short sale, has the lender approved the contract? If not, the seller will most likely continue to market and search for back ups. With a short sale, a buyer and seller can sign, but the third party approval is needed to make the contract binidng.
0 votes Thank Flag Link Wed Apr 9, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
HI Kelly - Legally, I have no idea, but the MLS has rules.
The new short sale MLS rules just started so I assume there will be some adjustment. The appropriate status according to the new rule on short sales is "pending - BU". (as in back up). You can always call the MLS and ask them to enforce the rule.
0 votes Thank Flag Link Wed Apr 9, 2008
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