What’s Required? Know Your duty to discover and disclose in the MLS Listings. The North Carolina Real Estate Commission says that agents have a duty to discover and disclose any information that may affect the buyer’s rights and interests or influence the buyer’s decision in the transaction, i.e. material facts. Additionally, in South Carolina, Byron King, Senior VP and General Counsel for South Carolina REALTORS®, advises that timely/proper disclosure is a risk management strategy: “Because the Residential Property Condition Disclosure Statement aka “seller disclosure” statute and case law provides a strong risk management liability for sellers and real estate licensees, South Carolina REALTORS® generally recommends that all listing brokerages require a seller disclosure and post/provide the seller disclosure in a timely/proper manner, which could include posting the seller disclosure to the MLS listing documents and/or putting seller disclosure copies into the listing property where buyers and buyer reps can read and take a copy and/or delivering to buyer/buyer reps prior to contract.” Although not required, the MLS listing is a great place to make those disclosures, but it is not the only way, and not all agents participate or subscribe to an MLS. If the listing agent has knowledge of information that would influence the prospective buyer’s decision to purchase the listed property, and the MLS provides a specific field that enables that disclosure to be made (an example is the Special Conditions field with the option to disclose that a listing is a potential short sale), then it would be a violation of the Canopy MLS Rules and Regulations Section 1#7, which requires the listing agreement and property data form to be complete in every detail that is reasonably ascertainable.
Specific to Canopy MLS. Canopy MLS does not provide fields to address every conceivable material fact, and we do not require all material facts to be disclosed in the MLS, especially if there isn’t a specific field for the disclosure. Disclosures of material facts should be made in writing and can be made outside of the MLS. For example, in lieu of making a disclosure in the MLS, it would be acceptable to disclose material facts in a flier placed in the property.
Agent/owner. Aside from being required by the “Realtor® Code of Ethics,” the “Canopy MLS Rules and Regulations” requires that participants disclose any ownership interest in a property listed in the MLS. Members Participants and Subscribers must show their name(s) if they are the owners of the property submitted to the service in the "Seller’s Name" field. Additionally, the "Agent/owner" field was added to the MLS system to satisfy this requirement. If the owner is not obvious (i.e., ownership by a business entity and the Member Participant of Subscriber has an ownership interest), the listing brokerage shall make the disclosure in the "Agent Remarks" section. Also, remember that the “Realtor® Code of Ethics” requires Realtor® disclosure when Realtors® represent any member of their immediate families, his or her firms, or any member thereof, or any entities in which he or she has any ownership interest, and such disclosure should occur in the "Agent Remarks."
Realtors® must disclose in writing to the listing broker any contemplated interest to acquire property listed with another participant no later than the time an offer to purchase is submitted to the listing broker.
Appraiser listings. Appraisers designated as a real estate broker-in-charge (BIC) can list property in the MLS. Appraisers with a broker license can list property in the MLS as long as they subscribe to the MLS under the BIC with whom they are affiliated.
Business for sale or lease. The MLS is not the place to list a business for sale or lease. If the business owner owns the property and he or she wants to list the real estate for lease (or, of course, sale), that can be done. However, a business is not "real property," nor is it an interest in real property – as is a lease. Generally, it is not the lease that the business owner wants to list (he could not do so even if he wanted to, unless the owner were to consent). The business owner hopes to sell the business or the assets, and assign the lease to a purchaser to facilitate the sale of the business. Canopy MLS only allows real property for sale, exchange or lease to be submitted to the service.
“For sale” and “sold” signs. Canopy MLS Subscribers often ask if it is OK to post a “For Sale” sign even though the property is not currently listed. In its February 2003 Bulletin, the North Carolina Real Estate Commission (NCREC) said, “Advertising another’s property for sale or rent requires not only permission of the owner but also a written agreement outlining the services you will provide.”
Even if the property owner allows the agent to post a “For Sale” sign on the property, the owner’s permission is insufficient because there are additional requirements for an agency agreement. Additionally, Article 12 of the “Realtor® Code of Ethics” says you must present a true picture in your advertisings or representations to the public. Therefore, an agent who posts a “For Sale” sign on a property that is not currently listed for sale could be considered in violation of the “Realtor® Code of Ethics.”
No brokerage other than the listing brokerage can place a “for sale” sign on the listed property.
Only the listing brokerage can place “sold,” “under contract,” “pending,” etc., signs on the property prior to closing, unless the listing brokerage authorizes the cooperating brokerage to post such a sign.
Inactive Subscriber, Participant. Listings of inactive Subscribers and inactive participants are not included in data feeds to Realtor.com, CarolinaHome.com or IDX Web sites.
Additionally, Canopy MLS staff takes the following action:
Although a listing might indicate the Subscriber or Member Participant is inactive, cooperating brokers must arrange appointments for showings and conduct negotiations with the listing brokerage unless, after reasonable effort, the cooperating brokerage is unable to contact the listing brokerage. Only after such efforts have been made to contact the listing brokerage is the cooperating broker (buyer agent) permitted to contact the seller directly.
Compensation disputes can be resolved through arbitration or mediation because most inactive Subscribers or Member Participants are still members of the Realtor® association.
No showings. The “Canopy MLS Rules and Regulations” and the “Realtor® Code of Ethics” say, “Realtors® shall not misrepresent the availability of access to show or inspect a listed property.” Be careful if your seller wants to list his or her home but does not want any showings for a certain period of time. If you do list the property in the Canopy MLS and prohibit showings allowed until a specified date, but your seller or you allow even one showing prior to that date, you might be accused of discrimination.
Security of property. The listing brokerage must not put combination lockbox codes or security system codes in any field of the MLS system. An infraction of this rule is a Category II violation and carries a fine.
Transferring listings. Canopy MLS staff can reassign listings to another office or firm. The transferring agent must complete the Listing Transfer Form. and it must be signed the Member Participant of the office releasing the listings. Canopy MLS does not transfer closed, withdrawn or expired listings.
Additionally, only Member Participants with head broker or office-broker permissions in the MLS system can withdraw listings.
Avoid a violation of Article 11. “The services which Realtors® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage…”
It is the buyer agent’s responsibility to review closing statements and to make sure all documents and any necessary funds are received by the closing attorney prior to the closing. Also do not assume that if offerings from the seller are in the MLS, it is part of the sale. It is the buyer agent’s responsibility to ensure that anything the seller is offering to the buyer (bonuses, home owner’s warranties, etc.) or leaving behind (i.e. appliances, stereo equipment, pool equipment, etc.) is outlined in the offer to purchase contract.