Wednesday, May 25, 2011

"Re-Listing" Issues with the MLS

Many real estate investors contractually arrange to be able to immediately list the property for sale (at a higher price). Legally, there is no problem with this (if done correctly). For example, I recommend stating that the seller is a "contract buyer". This removes the property from the stigma of being a short sale since the contract buyer is paying cash and re-selling as the "B" buyer in an A to B to C transaction.

This has served investors well. However, a problem has developed with the MLS. The MLS in some areas (and presumably more in the future) will not allow a new listing until the existing one is "closed". In some areas, this means withdrawn, temporarily withdrawn, or sold. This creates a problem for investor buyers because it inhibits their ability to re-sell. We all want and need investors since they are anywhere from 25-35% of transactions at the moment. It should also be noted that in many areas it is required that the agent upload property information directly from the tax records and this auto populates the fields. It also prevents multiple MLS entries for the same property because the APN will be duplicated and the second one will be removed from the system. Some agents have manually entered the information but this may violate MLS user guidelines and otherwise be actionable by the state against a licensee.

My suggestion is to place language in the purchase agreement that enables the investor buyer to re-list and add that the seller needs to do whatever necessary for the listing to be placed in the MLS. Listing agents may not like this, but we are all trying to complete transactions and it is better to be proactive in this regard.

one of the reasons that I suggest this, is that the investor buyer cannot control the actions of the listing agent. The only way to achieve the goal of being able to re-list the property in the MLS, is to contractually secure the right with the home owner. In this manner, the listing agent will have to comply with the request....

1 comment:

  1. Hello all,

    MLS stands for multiple listing service. Every home for sale listed by a real estate agent, unless it is specifically exempted from MLS, will be listed in MLS. A relisted home is input in the same way as a new listing. Thanks a lot...

    Sell House By Owner