It appears as though the NAR (National Association of REALTORS®) is pondering changes to rules concerning MLS's (Multiple Listing Services) and Short Sales. Rules that I believe are needed in our Local MLS. You see there are some things our MLS does not allow you to do because of rules they have in place. There are also some areas where concerns need to be addressed when it concerns short sales and bank owned homes. This makes it difficult when trying to sell or buy a home as a short sale or from a bank.
For example, there is the big problem associated with pricing Short Sales and bank owned. While there is no rule with how to list a home's price on our MLS, there could be a rule implemented that would require listing agents to price the home appropriately. Far too many homes being sold as short sales or REO's (Real Estate Owned) are underpriced way below a CMA (Comparative Market Analysis) and what is owed on the property. I have seen homes being sold for hundreds of thousands of dollars below comparables and what is owed on the home. Honestly, how many banks will allow you to sell the home for $200,000 less than what is owed?
I have found it to be a waste of my client's time and mine to make offers on homes that are not properly priced. I am sure you would all agree that it is no fun to negotiate a home's price in this market when we tell our clients home prices have fallen. And we end up negotiating a higher price than was anticipated. It was time that we could have spent looking at homes that were priced properly. Instead they falsely advertised the home's sales price below what would be accepted by the bank.
Next we come to the issue of commissions and what is owed to agents who are involved in a transaction. In our local MLS there are rules against changing the compensation owed to agents in the transaction. For example, if you as a listing agent advertise a listing with a 3% compensation for the Buyer's Broker/Agent, then you would owe that agent the whole 3%. Now it is a given if you work in real estate that commissions could and maybe negotiated, but that usually occurs with the listing agent and the home seller. However, in the current market with many homes being sold as short sales or bank owned, it is not up to the seller what the bank will pay to the agents in the transaction.
In fact, our MLS does not allow you to state in the remarks that commissions could be negotiated by the bank. Nor, is there a rule that states an agent should make it known that the home requires lender approval. As an agent I can tell you I think that many agents are who are unaware. I believe with a simple rule change all could become aware of this fact.
Personally I educate my clients with the ins and outs of buying and selling short sale/bank owned properties. However there are still many things I'm sure I am not aware of yet. But, I believe rules should be updated and implemented to better deal with the new market and challenges that come with selling buying homes as short sales/bank owned. This would make for better Agents who can help educat thier Clients.
Imnan News
http://www.inman.com/news/2008/04/28/industry-reacts-short-sale-rule-changes
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