An interesting question on Trulia today:
Q for realtors in Seattle. We have a signed purchase & sale agreement on a home. 48 hrs later, property is still listed as Active. Is this legal? How long does listing realtor have to change the status from Active to pending after delivering a signed P & S agreement? Our realtor and his broker has made repeated requeset for the status to be changed to no avail. What recourse do we have. When selling broker/realtor refuse to change status of property, what action should one take? what possible pitfalls have you seen when selling agent refuses to act as we have requested for status change? Anxious about your reply.
My long-winded response:
There is another way to look it this, especially when you bring up the issue of “legal” rights of the buyer and the seller. The seller more than likely has the right to continue to actively market the property all the way to the day of closing.
Remember, mls status changes and the internal “rules” governing those changes are often (depending on which rule) only agreements between its member agents, and may or may not be binding on the owner of the property. The status change is merely an “alert” to other member agents. Is it fair to the seller to stop the marketing of the home? Is it “legal” for the mls system to command that the seller be inhibited in any way from the marketing of their home during escrow and prior to closing?
Can the Seller continue to have Open Houses? Likely yes. Can the Seller continue to receive other offers during escrow? Likely yes. Whether or not they can accept those offers, is not an “mls rule” matter. For instance, if an owner received an offer that is $100,000 more than yours, it is not “the mls” that determines whether or not they can negate yours and accept that higher offer. There may be something in your contract, especially if it is a bank seller and bank addendum, that allows the seller to accept a higher offer. None of us here know that.
There may have been something during the negotiations that is alarming the seller as to whether or not you will actually close. Or they may think you will be unusually demanding at the time of the home inspection, based on what transpired during the contract negotiations. Or they may simply want the agent they are paying, to continue to market the property until after the Home Inspection contingency is satisfied or even all the way to closing. All likely within the “legal” rights of the owner of the home, and likely not in conflict with the legal contracts in place.
I know of nothing in any contract that gives the broker the right to STOP marketing the property or stop trying to get other offers at any time prior to closing. It is just “common practice” and not a matter of law, as far as I know.
Is there something in your legal contract with the seller that says he must show the property as “PENDING” and dilute the possibility of receiving more offers?
The broker MAY be faced with conflicting directives from the owner of the home and the mls “rule”. Does the mls have the legal authority to dilute the effectiveness of a seller’s wishes for the property to continue to be actively marketed?
So when you raise the question as to is it “legal”, the question may be is it legal for an mls system to remove the property from active marketing before the Home Inspection is complete? Seems the rights of the owner may be in conflict with the mls rule.
I recently had a situation where the seller was exceptionally concerned that the buyers would not close. This for their own reasons that had nothing to do with my buyer clients. The owner insisted (and the owner was an attorney) that their agent continue to have Open Houses during escrow and that the SOLD strip on the sign be removed. The mls response to the SOLD strip was YES we have a RULE that it should go up. But if the owner of the home wants it DOWN…the owner has the final say in the matter, regardless of the mls “rule” for “members of the mls”.
It is possible that the Seller’s Agent and the Seller’s Broker can not respond to your request, or even tell you why, as that may be the result of confidential discussions between the seller and their agents.
So my best guess is if you went to an attorney regarding your “legal rights”, the answer would be that the seller has the legal right to continue to actively market the property, and the mls rule may be in conflict with the seller’s rights in that regard.
In many mls systems around the Country a property moves to ACTIVE-BACKUP status and not to “Pending”. So it really may simply be “local custom” and not likely a matter of law that the property move to a “pending” status. In fact I believe it is only in recent times that our system shifted from “ACTIVE-Subject to Inspection” to “PENDING Inspection”. In today’s market environment that likely is a bad move, and not in the best interest of the seller.
Perhaps every owner of every home should be objecting to a “Pending” status prior to the end of the home inspection period. My best guess is the “legal rights” weigh in more heavily to the seller/owner side in this question, than the legal rights of a buyer prior to closing. How “binding” are “mls rules” on an owner of a home?
Perhaps every buyer should make their expectations as to continued marketing of the home part of the purchase contract, if they no longer want other potential buyers to enter the home during escrow?
Food for thought…and clearly blog-fodder.