MLS Data Entered Into A Listing Sheet . . . DOES NOT FORM A CONTRACT
Nina Hollander wrote a post which was very wildly commented on: Listing Agents in Danger of Misrepresentation -- a Cautionary Tale
In her post she described a recent decision made by the North Carolina Real Estate Commission.
DISCLAIMER: I am not privy to the rules / regs of North Carolina. Real estate is local, kids. This article is about my local market.
But, in my humble opinion: This was a bad decision on the part of the NCREC and I'll tell you why . . . it's all about the contract.
There are several layers to a listing and although I practice EXCLUSIVE BUYER AGENCY, I know a thing or two about listings. I am licensed to do both . . . take listings/represent sellers, and represent buyers. I choose to practice Buyers' Agency 100%.
That said . . .
The RMLS Data Load -- NOT to be confused with data LOAN!!
The information in the MLS listing sheets have never been, and never will be -- CONTRACTUAL!
Yes, the information must be accurate to the listing agents' best abilities. But, the information is NOT contractual.
The listing information merely indicates the SELLER MAY ACCEPT THE TERMS of a cash offer, or a conventional loan, or VA loan, or FHA loan.
And just because the "term" is indicated . . . that also doesn't mean the sellers won't accept another term in the offer.
If I had a client that wanted to offer the seller the financial term of: exchanging their 5 gold rings, 6 geese a'laying, and a partridge in a pear tree . . . even though it's not indicated in the "Financial Terms" I could write that into the offer.
In other words: Just because the "terms" might not be indentified in the RMLS listing sheet, doesn't mean the seller won't accept anything other. They may!
I've written up offers on property where the "Financial Terms" in the listing sheet were only CASH, CONV. The buyer/borrower wanted to go VA, and I wrote that into their offer.
Sellers accepted VA . . . which is NOT to be confused with the property quailifing for a VA loan.
That's up to the appraisal AND the underwriter!
Screen cap of the RMLS Financial information on the listing sheet:
The buyer financing is one thing, and one thing alone, when it comes to the buyer/borrower closing the transaction: CONTINGENT!
A contingency is a provision in the contract which must be performed FIRST, and then . . . the rest of the contract can be perfected.
- a future event or circumstance that is possible but cannot be predicted with certainty."a detailed contract that attempts to provide for all possible contingencies"
synonyms: eventuality, (chance) event, incident, happening, occurrence, juncture,possibility, fortuity, accident, chance, emergency "we've tried to imagine and provide for all possible contingencies"- a provision for an unforeseen event or circumstance."a contingency reserve"
IF . . . IF . . . IF
If the buyer/borrower can OBTAIN an FHA loan . . . so . . . riddle me this NCREC how the heck can ANY real estate agent know that?
In my local market, putting FHA in the listing sheet as a financial term does not MEAN, INDICATE, SUGGEST or otherwise denote the property QUALIFIES for this type of financing option. That's up to the lender, the lender guidelines, the appraisal, the underwriting
If the listing forms used in NC indicate that the seller and/or their real estate agent KNOWS that the property will "qualify" for a specific loan . . . the listing forms are FLAWED on their face!
So whomever rendered the NCREC ruling seems a little confused, IMHO.
The financial terms the seller may accept merely suggests the seller may accept that type of financing.
It DOES NOT MEAN THE PROPERTY IS APPROVED FOR THAT TYPE OF FINANCING!
Any "information" about the property in the listing sheet DOES NOT MEAN, and/or imply, that anything in the listing sheet forms a legally binding CONTRACT!
The CONTRACT forms the CONTRACT!
The information provided in the MLS listing sheets is not signed by buyer and seller.
While information contained in the MLS listing sheets is to provide information, it's still not CONTRACTUAL.
What's in the Contract?
In our contracts the Financing Contingencies are clear. And it's the BUYER and their agent who completes this. IF the buyer is trying to obtain FHA financing the terms are covered: the buyer/borrower AND the property must be approved. It's a financial contingency.
Period.
End of story.
Here is a screen cap of the FINANCING CONTINGENCIES which are stipulated in the Sales Agreement in my local market:
The Buyer's LENDER has more of a burden in this entire NCREC ruling than whatever was posted by the listing agent in the MLS list sheet. The LENDER needs to review the contracts -- and they never read them -- and make sure their customer, i.e., the borrower AND the property will qualify under the FHA loan terms the buyer/borrower wants to obtain.
This ruling sets a very slippery slope to ALL agents. It's not up to the Listing Agent to consult a palm reader, get their tarot cards read, ask the Magic 8-Ball about a CONTINGENCY!
The FHA term is subject to MANY REASONS why a buyer/borrower and/or property can't obtain the loan. That's why FINANCING is a FREAKING CONTINGENCY!!
It's not up to the BUYER'S Agent to advise their client that the FHA term does / does not work with the particular property either! The terms and conditions AGREED TO are found in the CONTRACT.
I doubt, very seriously, in our local market, using our standard Residential Sales Agreements that the ruling would have been made in the same manner as Gina writes about.
Real estate is, indeed, local.
I like it here!!
BTW . . .
Happy Valenties Day!
As you see from our listing sheet, the "Terms" are under the Financing field. But, this isn't set in stone either. If the seller only has CASH, CONV that doesn't mean they won't take VA, or FHA . . . or a trade (although rare). 
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