Short Sales: Things to include in the Listing Agreement and MLS

I hope that this information is valuable to you with your short sales.

In the Listing Agreement ***

1. Seller's release to inform potential buyers of the situation and to explain the situation in the MLS. (CAR form: Authorization to receive and convey information). CAR FORM ARC, 4/04

2. Seller's authorization to allow you to inform buyers and other brokers that the lender(s) must accept a short payoff to close the sale at the listing price.

3. Seller agrees to the commission per the contract.

4. Seller authorizes you to contact lender(s) to discuss the program.  Seller agrees to sign a letter authorizing the lender to accept you as the seller's representative.

5. Seller understands that there are tax ramifications in a short sale.  Seller is instructed to seek tax advise from a professional, and that you will not give tax advice nor are you liable for any income tax consequences.

6. Seller understands that many lenders have "workout" programs that may allow the seller to keep the home, but still wants you to list the home for sale.

In the MLS

1. Make a notation about the lender's required approval, such as "sale terms are subject to consent of lender(s).  Contact listing agent for details."

2. Make a notation in the confidential remarks to address a common question ahead of time, such as "short sale, subject to lender approval.  And reduction in total commission received will be split evenly between listing and selling brokers."

*** Please use the form: Addendum to the Residential Purchase agreement (PAA) to address all the items listed under "in the listing agreement" if it is not cover on the original it will be addressed in this addendum. 

Please note:  Addendum to the residential purchase agreement under - Section: 5 SHORT PAY ask for an answer by a certain date and time from the lender.  This is helpful so that you don't miss dates (i.e. Trustee sale) because once its trustee sale date and time, you just ran out time!