Bye-Bye STI

NWMLS treesThe NWMLS has announced that as of June 24th 2008, they will no longer use the term. Active STI. It will become Pending Inspection and two new statuses will be created, Pending Feasibility and Pending BU Requested.

For those who are members and have access to the database, all three statuses will appear in the pending section of the Hotsheet. Pending Inspection will be used when the property has a signed Purchase and Sale Agreement and has an inspection scheduled. Pending Feasibility will be used for listings where a purchase and sale agreement is signed pending a feasibility study. Pending BU Requested will be used when the seller would like to receive back up offers.

Once the inspection or feasibility study is completed the listing must be changed. The listing would be set to Active, if the inspection or feasibility study were not waived and the sale fails, or Pending, if waived.

The most significant change is that properties with a Pending Inspection status (formally STI) will not be visible on the public websites. All pending statuses shall be considered off-market and will be treated as follows:

  • They will not accrue market time.
  • They will be included in the Pending section of the NWMLS monthly published statistics.
  • They will not be included in the NWMLS Standard IDX feed and cannot be displayed on a web site.

I’m sort of surprised that Pending BU Requested will not be in the IDX feed and can not be shown on public websites. This goes counter to what Sellers want. That is, continued exposure to the market. Perhaps this will change with time too if the NWMLS receives feedback about it.

Comments

  1. I recently wrote a blog piece suggesting STI should go away entirely, and then at the suggestion of someone else in the comments I backed off and thought it should become part of pending.

    http://blog.seattlepi.nwsource.com/realestate/archives/139625.asp

    This really isn’t quite that. The NWMLS could have done much the same thing as to agents by simply deleting a default checkmark on searches that included STI. As to others, they could simply change the feeds, presumably.

    BTW, for an agent that is a “Realtor” wouldn’t it be an ethical violation to not put on the BU status? I’ve always wondered that with the existing Pending status.

  2. "BTW, for an agent that is a “Realtor” wouldn’t it be an ethical violation to not put on the BU status? I’ve always wondered that with the existing Pending status."
    Kary – It’s not so much a question of ethics, as it is about marketing. When one of my listings goes STI, I have a quick discussion with the Seller about the pros and cons of having it marked for "accepting back up offers", and make a decision of how to handle it. Most Sellers actually decline to do this because they are so relieved to have a transaction and they can stop showing their home. Usually an inspection will only take a few days and they wil know if they have a firm pending transaction or not.

  3. Jim, my recollection was faulty as to the ethical rule. It is: “REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord.” I thought is was shall.

  4. Eric Heller says:

    I can’t even begin to imagine why they would think pulling STIs down is good for anybody. As a past seller, the prospect of incoming back up offers was an excellent way for me to ensure my buyer stayed engaged.

  5. Hi Jim,

    Any word as to what the motivation was for the change?

  6. Jim,

    How do you see the NWMLS enforcing these new statuses? Is this going to be viewed extra steps that cause red tape by Brokers and Agents?

  7. Jim, Just for one day I want to change places with some of the people who continually are coming with new and sometimes crazy add-ons and forms for our business. I want to see them constantly keep agents and clients fully informed. And then have the nerve to place heavy fines on everything that is in force. I am all for making this business function at a higher and positive level. But at least think some of these changes thru to the end and what could happen.

  8. Jillayne, you don’t think the motivation for the change was my blog piece? ;) :D

    Ryan–they’ll enforce through fines. This is really no different than the current system in that regard. It will just be entering something other than STI before going to Pending.

  9. Yes, a $10,000.00 fine for non-compliance is pretty motivating.

  10. As far as enforcement goes, I would assume they will deal with it the same way they dealt with previous status violations, by warnings and fines. I think this has been mostly self-policed, with agents turning in agents who egregiously abused the system.

    My sources at NWMLS say that the motivation was to better convey the actual status of the listing to the public. Most people who are not intimately involved n real estate are not knowledgeable about the term “STI” or even what “subject to inspection” means. This has caused a lot of confusion in the marketplace.

    As for keeping agents informed, I’m going to come down on the side of NWMLS here. I think they do an excellent job of putting information and changes out on the Discover website (the NWMLS database portal). Agents, however generally DO NOT do a good job of monitoring the changes posted there, IMO.

  11. Huge fines stifle innovation. Trying something new should perhaps come at a cost…but not a cost that prohibits anyone even thinking about trying something new.

  12. Well I do like the idea that the days the property is under inspection or feasibility do not count in CDOM. It is a bit of a jinx when a seller gets an offer within days but buyer changes mind during inspection and rejects buying it. This improves that problem a bit.

  13. denismurf says:

    1. What’s a feasibility study?
    2. Will there still be a “contingent” status?
    3. Is it true that an agent/firm can simply pull a listing off the MLS without giving a reason? Or, do they have to give a reason, but not to the MLS that’s visible to the public?

  14. SitkaJohn says:

    So what is the justification for such a change? If I’m a buyer, I’d like to see a listing particularly if the seller is still looking for back up offers. Why are they restricting information from potential buyers? Hows that supposed to help the market?

  15. Denismurf,

    A feasibility study is typically done by a builder or a developer to tie the property up for a longer time period than a home inspection so that they can check zoning issues, soil studies, water samples, engineering studies lots of things like that. The buyer is spending his own dime to do these studies, so the time period can be lengthy depending on what buyer and seller agree upon.

    ‘Contingent’ will still show, since it is ‘bumpable’. An STI wasn’t ‘bumpable’, so it is really more accurate to show as an STI Pending or some such thing.

    There is a category called ‘temp off market’ that an agent and seller can use, but they must have a reason. Often it is something like a seller having surgery, or the dishwasher broke and flooded the kitchen so repairs need to be made, things that can come up. The seller can have any reason, there really isn’t a limit.

    Buyers, you have to remember, you are not part of the NWMLS system unless you are a licensed real estate agent and the company you are licensed thru chooses to belong. And, I don’t see that something that is Pending is pertinent to your internet searches – it’s sold, and if it comes back on the market, it will reappear as active.
    Any agent can find out if any Pending sale is listed as requesting backup offers.

    Ardell, I don’t know that the NWMLS fines are so huge anymore, but like Jim said, I’m kind of bad about reading each and every notice that they post – it depends on the day. Some days I’m not on their site at all, and might miss something that was highlighted for that day’s news. Maybe they should email us news bulletins once a week or something like that ?

  16. Real success in the market takes time and money. Unfortunately “most people view the market as the place where the miracle of great and quick riches can be performed with little effort

  17. denismurf says:

    Thanks, Leanne.
    My question # 3 in post 13 concerns listings we’re following that one day just disappear. One day, they’re on all the databases with status Active. The next day, the For Sale sign is gone, and they do not appear anywhere on realtor.com or zillow or Redfin. My question is: can a MLS member tell by looking at the full MLS whether that disappeared property is Pending or was taken off the market altogether? Or, another possible route, do protocols allow a buyer’s agent to ask the listing agent what happened (i.e., pending or removed from the market?)?

  18. Denismurf asks:
    1. What’s a feasibility study?

    Leanne is correct that this type of contingency is generally used by builders and developers, but there are cases when it applies to a residential property being purchased by an average family. Feasibility is used when the buyer ONLY wants the property IF… The process of determining IF is time consuming, so a buyer wants to tie up the property during the process. Say it has a carport and the buyer only wants it IF he can, under local codes, convert the carport into a garage. Feasibility is generally ONLY used if the buyer doesn’t want the house at all, unless they can add a second floor, add a garage, or something that would require them an extended timeframe to gather additional information.

    2. Will there still be a “contingent

  19. Leanne,

    I’d be more likely to report an agent who didn’t call the PTS first or leave a card if the fine was a few hundred bucks. When the punishment doesn’t fit the crime, and $5,000 is clearly we too much for these issues, it is counter-productive. If you didn’t leave a card in my listing, for example, there’s no way I would want to take an action that could cost you $5,000! I’d be happy you showed my listing. If the fine was $25, then I would.

  20. Sitkajohn,

    It is not remotely the purpose of the mls to “help the market”. It’s to help the members function better.

  21. The automatic fines aren’t that big. It’s only a $50 fine for not reporting status in a timely manner. But if you continue to break rules and there’s a regular pattern, I think they have the option of fining you a lot more. http://docs.google.com/fileview?id=F.a73306f7-ca3e-4efe-978f-fd157e7b559c (Must have Google acct. to view.)

  22. denismurf says:

    Sorry, Leanne and Ardell, I still don’t know what it means exactly if a property disappears. Specific example, then I’ll go away and won’t take personally if you decide you’ve already spent too much time on this.

    About 3 months ago, 3 of the 4 condos at 520 Walnut in Edmonds went on the market and stayed there (complete with signs and presence on publicly accessible websites) until one day a couple of weeks ago, when 2 of them just vanished from the online sites, and their signs disappeared too.

    As somebody who’s trying to be a well-informed house shopper, can I assume that they were taken off the market for reasons other than a pending sale?

  23. As somebody who’s trying to be a well-informed house shopper, can I assume that they were taken off the market for reasons other than a pending sale?
    I would not just make the assumption. This is where a call to your agent is warranted. They can look it up, and make a call to the listing agent on your behalf if it’s not clear. I did some investigation and In this case, unit # 2 it was cancelled and will be relisted again soon. #3 was cancelled and they have gotten a renter, and #4 is still active – you should be able to still see this one. I hope that answers your questions.

  24. Hi Denismurf, it’s always ok to contact a listing agent and ask a question. If they don’t feel they can answer it, they’ll tell you.

    For any property that had signs and listed info on the internet, and suddenly signs are gone and no internet listing info, it should mean at that moment, it is either Pending, Closed, or no longer listed with that company/agent.

    As to 520 Walnut, only 1 still shows as For Sale, 2 were taken off the market and are no longer for sale thru the NWMLS. Who knows why other than they do not show as Pending sales. We don’t have that detailed kind of information, just that the properties are no longer listed for sale. And, a seller would still owe his agent (and perhaps a buyers agent) a commission for a period of time if the seller sells to someone who saw the place due to the efforts of the listing or buyers agent.

    Sometimes as agents we do have buyers or agents contact us after a property has been taken off the market. It certainly isn’t offensive to ask if the seller still has interest in selling.

  25. denismurf says:

    Perfect. Thank you, Jim and Leanne.

  26. denismurf,

    Generally speaking the sign stays up until a couple days after close of escrow, not when it goes pending. The sign is usually ordered to come down when escrow closes.

  27. And a “Sold” sign means pending sale, not that it closed. Where the other agent doesn’t put up a “Sold” sign within the 3 days allowed, I’ll put up a “Pending Sale” sign because it’s less confusing and might trigger a backup offer. Also, where no sign is put up I once had an agent accidentally walk in on my listing, so a “Pending Sale” sign helps prevent that mistake.

Trackbacks

  1. [...] For the full scoop on this change, check out this detailed post from Jim Reppond over at RCG. [...]

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