Is it legal/ethical for a broker to list a property as active in MLS if there is an accepted offer on it?

Asked by Kermit, 07728 Wed Feb 22, 2012

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12
Mary Petti, Agent, Edison, NJ
Wed Feb 22, 2012
KErmit,

To make things a bit more complicated....each MLS has it's own "status" designations.

Middlesex MLS has an AR (attorney review status) and a U status (meaning Under Contract)

Garden State MLS has an A* status (meaning its in attorney review), a UC status (meaning under contract) and even has an UCS status (meaning Under Contract, Continue to show)

Now to answer the question, with so many contracts falling apart while in attorney review (and even after when under contract) it behooves the listing agent for the seller to continue to show the home at least till attorney review is concluded and sometimes this is done for "back-up offers only". Technically another contract CAN be submitted on the home till day of closing, but typically once under contract, the sellers will instruct their listing agent (in writing) not to show the home any longer (unless the contract is weak then its a UCS or it's equivalent)
1 vote
Wayne Odenbr…, Agent, Mountain Lakes, NJ
Wed Feb 22, 2012
It depends on the rules of the individual MLS service and the instructions the Listing Agent gets from the Seller. Sometimes an accepted offer is very weak, with contingencies, so they leave it in the Actiuve status with the full knoledge of the Buyer. A Seller will sometimes seek backup offers that way as well. It is always good to put "Backup Offers Only" in the Listing
1 vote
John Sacktig, Agent, New Jersey, NJ
Wed Feb 22, 2012
Kermit -

Where would the words “legal or ethical" fall into your question. Can a listing be put in the system with an accepted offer? You need to clarify that statement.

You state the broker "listed" the property as active here -or- do you mean it is on the system and it is still active wiht an offer.. big difference.

Is it on the system already? And it is in attorney review with an accepted offer? Yes, it can be.

Is it NOT in the MLS and the agent wants to get "points" for the sale? Then a listing contract would have to be prepared, signed by the seller and then.. Yes.. it can be put into the MLS system.

Is it in the System and you made an offer and just WANTY no more showings on the property? Yes, the house can be shown for back up offers.

Aside from all of that.. The words legal and ethical.. Have nothing to do with the question.
1 vote
Andrew Tisel…, Agent, clifton, NJ
Wed Jan 2, 2013
Yes

An accepted offer is not binding in NJ. until it is under contract and all contingencies have been met. The seller has the right to continue to find buyers and the agent is obligated to do so. Once under contract the seller should only get back up offers.
0 votes
Weichert Rea…, Agent, Watchung, NJ
Tue Mar 6, 2012
Kermit, what is the status of the sale? When will you close? Regards,
0 votes
Jonathan Bow…, Agent, Red Bank, NJ
Mon Mar 5, 2012
Technically, a broker is not allowed to change the status of the house to "Under Contract" until the home is out of attorney review. If there is an offer that is accepted and currently in attorney review it is up to the homeowner as to whether they would like to keep showing the house. Hope this answered your question.
0 votes
Gary Geer, Agent, Antioch, IL
Fri Feb 24, 2012
Kermit,
In our area we show properties in Active status, but contingent during this period. We have an obligation to our seller's to continue to entertain backup offers from other buyers. This way if something comes up and the sale falls through, the seller's may have another buyer to buy their home.

All the best,
Gary Geer

http://www.GaryGeer.com
0 votes
Weichert Rea…, Agent, Watchung, NJ
Fri Feb 24, 2012
Let the Broker their job. Ther are many common closing issues. As any Realtor what could go wrong at the closing table. Regards,
0 votes
Susan Taylor, , Freehold, NJ
Wed Feb 22, 2012
Yes it is legal and ethical. As per answers below, even though an offer is accepted by the seller, it is not officially under contract in Monmouth County MLS until the attorney review process is over. When the attorney review is completed, the home is then considered Under Contract, at which time the listing agent will update the MLS as Under Contract. This does not bode well with the buyer as he/she may lose out on the home if a better offer comes in. It is, however, advantageous to the seller. Having multiple offers (either before or during attorney review) on a home often gets the best price for the seller.
The listing agent should advise any buyers agent/prospective buyers inquiring on the home that there is an accepted offer.
I see you list yourself as a home seller. Hope this is the case and you have not found yourself on the losing end of an offer you have made!
0 votes
Dana Cadena, Agent, Morganville, NJ
Wed Feb 22, 2012
Good question, Kermit !

For our Monmouth/Ocean MLS Board, if the accepted offer is not yet out of attorney review, then it is normal and customary for that property to be noted in the Multiple Listing system as: active.

However, when attorney review concludes, then the property should be logged as: Under Contract. With that stated, many times a property is labled as: Under Contract with a note 'continue to show' mainly for back up offers, which is typical to practice, in this market.

Yet, I do know of Brokers/Agencies that still allow a listing to be marked as "active" in the system with a note to the agents to show for back-up offers only.

Hope this helped! Feel free to reach out to me with any other questions or scenarios. 732-306-3062.

Best,
Dana
Web Reference:  http://www.DanaClosedit.com
0 votes
Purnima Talw…, Agent, Morganville, NJ
Wed Feb 22, 2012
Hi, Yes the property has to stay active till its out of Attorney review in our Monmouth ocean MLS system. This is because during attorney review either party can cancel for any reason.
Some other MLS system have a feature to mark it as Attorney review while we don't in Monmouth.
In some cases depending on the arrangement between buyer and sellers the property can still stay active after being under contract for back up offers.
Feel free to contact me at 908-770-5999 if you have any other questions.
0 votes
Aurelia Isid…, Agent, Wall, NJ
Wed Feb 22, 2012
Yes. We cannot change the status in the MLS to Under Contract until it is out of attorney review. In the meantime, your agent should let anyone who inquires on your property know there is an accepted offer.
0 votes
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