Inaccurate statuses and untimely updates in the TREND database continue to be the most frequently reported accuracy complaint and has an adverse effect on your sellers, buyers and the TREND community at large, who rely heavily on this information to be reliable and accurate.
A recent audit conducted on randomly selected ‘Pending’ listings in our database revealed a significant deficiency in updating the status within 72 hours as required by TREND’s Rules & Regulations.
You may have several reasons to not promptly update a listing in the MLS: confusion about the rules or attempting to follow the wishes of the seller. It is frustrating for other members and their clients to find that the property they are already excited about seeing is actually under agreement. Imagine yourself having to give that explanation to a client and having to deal with their disappointment. Not only could you lose their trust but you may also lose them as a client.
So, in this Q&A, I’ll address questions like this specifically.
Question:
"I always use the Pending status if I only have inspections and mortgage to get through. Is this correct?"
Answer:
Usually but not always. Home inspections, mortgage and appraisal contingencies are usually just formalities in the process, and usually lead to a sale. So it would seem to make sense that the listing be set as a Pending status.
However, the appropriate status is based on whether or not the seller wants to continue showing the property. That is where “not always” comes into play.
When updating your listing, the information in the agreement of sale ultimately determines the status of your listing. The MLS system will prompt you to answer questions about the terms of the agreement of sale as to whether or not:
- The buyer or the seller has the right to terminate the contract AND
The seller has instructed you to continue showings AND
- The seller will accept a back-up offer
Your answers to these questions will determine the appropriate status and if applicable, set the contingency indicator (ACT-A, ACT-E, ACT-F, or ACT-O).
If the seller
does not wish to continue showing the property, the system will assign the Pending status to your listing.
If the seller
does specifically wish to continue showing the property, the system will assign your listing the appropriate contingency indicator. Of course, beforehand you want to outline to your seller the legal risks associated with considering additional offers and continuing to market the property.
Question:
"At what point must a short sale purchase offer (awaiting lender approval) be updated in TREND? Should I wait until the lender has approved the sale, which could take several months?"
Answer:
Once the seller accepts the purchase offer, a contract is formed and the offer is accepted with at least one unresolved contingency: the lender’s approval of the short sale. The listing must then be updated in TREND within 72 hours of the seller’s acceptance.
There seems to be a general misconception that the purchase offer does not become fully executed until the lender (or lien holder) has approved the short sale. But the lender is only a third party to the transaction. Once the
seller accepts the offer, the listing must be updated.
In almost all cases of a short sale, the seller wants to continue to consider other offers in case the transaction falls through. So typically a short sale that is under contract would be
assigned an ACT-O indicator.
Note: listings in TREND which are designated as ACT-O get automatically converted to Pending status after 21 days. However, short sale listings can remain in the ACT-O status for
60 days before being converted to a Pending status.
Question:
"I know that I should update the status of my listing since my seller has accepted an agreement but he/she has requested that I not update the listing until all contingencies have been met. What should I do?"
Answer:
You should update the listing within 72 hours of the acceptance of an offer.
We understand that you want to represent the interests and fiduciary obligations of your clients. However, you need to do so within the guidelines of the industry. In this case there are the
National Association of Realtor (NAR) guidelines and
MLS guidelines by which you are also bound. It is your duty to explain to your client the reasons for updating the listing, and the risks of not updating it.
In all cases, the listing broker is obligated to comply with TREND’s rules, as it is part of his/her membership agreement.
TREND continuously monitors listings, and contacts listing brokers and agents to address status update issues with them directly. We do issue fines for blatant and repeat violations.
To report an inaccuracy in the status of a listing, please use the accuracy link or contact the Support Center at 800-330-9900.
I would like to be able to provide answers to other questions you may have. Feel free to leave your questions in the comments section and I'll try to answer them for you.
Rose-Marie Lucas • Policy Resource Specialist
Rose-Marie joined TREND in May 2001 as coordinator for the Industry Relations Department. She is currently the Policy Resource Specialist, and is responsible for managing escalated compliance concerns, providing editorial contributions, and much more.