Short Sale Listings To Require Five Days in MLS


New Rule Effective August 1st

By Kate Sax, Director of Professional Standards, MORe


Fannie Mae and Freddie Mac recently announced changes to their Standard Short Sale and HAFA guidelines that will require GSE approval. Beginning August 1, 2013 any property being considered for short sale approval must be listed in the multiple listing service (MLS) for five consecutive days, including one weekend, prior to Fannie Mae or Freddie Mac approving a short sale offer. 

The new guidelines are designed to improve the marketing of listed short sale properties that require GSE approval.

"The rule is designed to make sure that short sale listings are marketed in a manner to allow the market to see the listing. We have had instances where the short sale property is listed in the MLS and in less than hour it goes into pending status," said Andrew Wilson, Director of Media and External Relations at Fannie Mae. "In some cases, there is already an offer on the property without the broader market having an opportunity to see the listing. We want to make sure the entire market has the opportunity to see these listings and evaluate them and make offers to make sure we are getting an appropriate price."

This new rule will change the timing of when sellers can accept offers on short sales that require GSE approval. "While an offer can be submitted, a seller following the new rule cannot accept an offer until the end of the required five-day marketing period," said Lynn Madison, owner of Lynn Madison Seminars. "This new rule I am sure is also designed to combat fraud. There are cases where listing agents were putting houses on the market and selling them to their investors and buyers. The rule is designed to make sure the properties are given full exposure to the market."

The Midwest Real Estate Data LLC (MRED) is planning to include information about the new rule through its communications channels with the MLS that serves 40,000 real estate professionals. 

"MRED already has in place the ability for agents to identify listings in the system as short sales, especially as that can impact upon compensation at closing," says Russ Bergeron, Chief Executive Officer for Midwest Real Estate Data LLC (MRED). "Also, we can pull those listings where the agents choose to identify them as potential short sales and notify those listing agents directly. I doubt there are too many short-sale pocket listings, though Fannie Mae appears to be addressing that concern in this rule."

Fannie Mae announced the change in a Servicing Guide announcement in June, to "Multiple Listing Service Requirements for Standard Short Sale/HAFA II". The Servicing Guide is published on the Fannie Mae Website. 

 

 Short Sale Listings to Require 5 Days in MLS