BrokerBryant.com: MLS Rules Require The Seller To Accept A Full Price Offer. Really?

MLS Rules Require The Seller To Accept A Full Price Offer. Really?

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I know most of us are members of an MLS (Multiple Listing Service). The MLS I belong to is run by MLXchange and is called My Florida Regional MLS (MFRMLS).The Rules and Regulations are 38 pages long.


I've read them all. Being a Broker it's my job to know these things. And it's your job too. Have you read your MLS's Rules and Regulations? If not now would be a good time. Go into 2013 being fully informed of what you can and can't do.


Here's an interesting clause in the MFRMLS Rules and Regulations:


ARTICLE 7 - REFUSAL TO SELL


  • If the owner(s) of record of any listed property filed with MFRMLS refuses to accept a written offer satisfying the terms and conditions stated in the listing, such fact should be transmitted immediately to MFRMLS and to all Participants by withdrawing the listing.

 

WOW!! Does your MLS have a similar rule? What they are stating is that if the seller doesn't accept a full price offer then the listing needs to be removed from the MLS. Really?


I do not agree with this at all. Negotiations are between the buyer and the seller. PERIOD. I'm not aware of any law that would prohibit a seller from negotiating upward from the asking price. Heck this is standard practice with REOs. List low and create a bidding war. This technique helps to insure a "market value" contract price.


I guess in order to  fully protect my sellers I can just add this clause in the MLS Realtor remarks:


  • "Seller will only accept cash offers that are at least 20% higher than the list price. No financing contingency and no inspection contingency. All other offers will receive a counter offer"


My opinion is that the MLS needs to step away from telling us how to market and negotiate our listings.


Whay say you?


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Comment balloon 18 commentsBryant Tutas • December 30 2012 06:19AM

Comments

Bryant:

Wow you make an excellent point. I am not sure if this kind of wording is in our MLS agreement I will have to check. I do have a friend whose business is built on the practice you mention: List low and get a biddig war going. He never sells at the list price.

Posted by Alan Kirkpatrick, Alan in Austin (Austin Texas Homes) almost 7 years ago

You're right of course.  I just got a full price, cash offer of $350,000.  Well, they're asking for 3% closing costs (?) and a too quick closing and then a lease back to the sellers.  Point is, there are other terms to an offer besides the dollar amount, that need to also be taken into consideration.

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) almost 7 years ago

WOW!  That is rediculous in the extreme.

NO, our MLS does not have such a rule. 

More reason for a listing agent to state in the listing, not only the list price, but the TERMS AND CONDITIONS acceptable to the seller.

I understand that MLS rules are essential, but this representa an interference with agency relationships.   The MLS is NOT a party to the Contract of Sale.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 7 years ago

Bryant: With the market coming back and prices on the rise in many areas, there will be many opportunities for above list offers. This clause seems not only stupid, but a restrictive trade practice. Off to check out all the rules for my local MLS. Happy New year!

Posted by Anne M. Costello (Weidel Realtors) almost 7 years ago

Bryant, I've had occasion several times to review both of the MLS that I belong to rules and regs, I've never seen anything like that.  Lenn is right, MLS shouldn't be a party to the Contract at all. 

Posted by Mona Gersky, GRI,IMSD-Taking the mystery out of real estate. (MoonDancer Realty, Dillsboro,NC) almost 7 years ago

WOW! Seems to be the word of choice for this foolishness. I understand that the MLS needs to protect the integrity of the system BUT they let this cat out when they allowed brokers to reduce the co-broke after it has been accepted by the cooperating broker.

OPTION TWO: If the listing Broker DOES want to bind the cooperating Broker to be obligated to accept a reduced commission amount as determined by owner(s) of record lender(s), the following remarks must be placed as the first words in the public remarks: “Short Sale”
And the following remarks must be placed as the first words in the Realtor Only Remarks:
“Short Sale; approval of the owner(s) of record lenders(s) may be conditioned upon the gross commission being reduced, any reduction of the gross compensation will be apportioned (insert apportionment or split) between listing and cooperating brokers.

**********************************

Integrity? No more.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 7 years ago

Ridiculous rule.  With the many other factors involved in an offer, it would be hard pressed to 'force' an acceptance or have the listing pulled.  What about the common strategy of slightly under pricing in order to elicit multiple offers? What about cosing dates?  The strength of preapprovals?  (I advise my clients on what lenders have burned my clients in the past).  The primary person that suffers if a seller is playing games, is the listing agent and his/her credibility.  No one will want to show their listings anymore.  Yes, the buyer agents will have wasted some time as well. 

You cant regulate seller's behaviors.

Posted by Gary Rogers (REMAX On The Charles) almost 7 years ago

Wow is right. That's way to much control. Sometimes I think the is whole mls, NAR, local associations ect are agin to a union.

Posted by Joel Weihe, Helping you to use your VA home loan benefits (Realty World Alliance) almost 7 years ago

I can't say I've read all the MLS rules in my area... sounds like a good idea.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 7 years ago

BB...

Why have a list price at all if it soesn't mean anything? Why not just put one dollar as the price? What's the difference?

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) almost 7 years ago

I have seen this before but was told that it does not mean what it says, go figure but that if the seller did not accept full price and terms offer then the facts would have to change or the listing removed.

Posted by Charles Stallions, 800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl. (Charles Stallions Real Estate Services ) almost 7 years ago

We have similiar language in the Gulf South MLS in the New Orleans area. The wording is exactly the same except that it doesn't say "withdrawing the listing" at the end.  Who puts terms into the MLS on a listing? This is only about price and is ridiculous......

Posted by Miriam Bernstein, CRS almost 7 years ago

Hi BB, In California a full price offer that meets all conditions is one that fulfills the broker's obligation to the seller and is therefore deemed to have earned his commission. Specific performance would, in most cases not be enforced, but damages would be assessed. I think the MLS rule is fair. I think it could actually go further and require payment of commission.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 7 years ago

Richard. The issue is that the MLS Rules and Regulations have a clause that really couldn't be enforced. Mainly becaue they have no clue what terms and conditions my seller will deem acceptable. Price is only one factor.

The MLS exist to give brokers a tool to share information on properties and offer compensation to other agents if they sell the property. It doesn't exist to restrict how we price and market our properties. At least that's opinion.

Bill. What you stated would depend 100% on what the listing agreement states. And that's between the agent and the seller. Whether or not someone is owed a commission depends on the offer of cooporation not the price.

Listing brokers can look to the seller for commission. Selling brokers can only look to theor buyer or the listing broker for their comission. Selling brokers cannot go after the seller for the commission unless they have an agreement with them.They cannot go after the seller.

Brokers who are REALTOR(S) must arbitrate broker to broker commission issues with their local board. Procuring cause is what entitles an agent to be paid if there is compensation being offered.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 7 years ago

Seems like a restriction on free trade bordering on price fixing (once a price has been entered into the system).

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) almost 7 years ago
As we all know, a full price offer certainly may not always be a good offer. Especially when they ask the seller to pay for all of their closing costs, give them all of their furniture, appliances, and the boat that is hanging in the boat stall. Oh yeah, and the riding lawn mower. Really?! By the way... They want a 3 month closing date, but they need to move in next week, and do not intend on paying rent.
Posted by Joni Bailey, Your Huntsville / Lake Livingston Area REALTOR® (101 Main St. Realty) almost 7 years ago

BB, I don't disagree with anything you just said. But if I put my listing on our MLS and another agent brings a full price and terms offer, I'm going to owe him (or her) a commission and my seller is going to owe me a commission. If a seller can refuse a full price and terms offer with impunity, we are in a very bad place.

BTW, I see you are now advertising yourself as an Orlando agent. I thought there was a fence around Poinciana and you couldn't get out. Some things do get better with time.

Your long lost friend,

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 7 years ago

I'm not sure that it is our MLS rules or rather only in CA RLA, but we do have a clause that if during a listing period the seller received a full price offer or above, but refuses to accept it, the agents are entitled to full commissions.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) about 4 years ago

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