Changes to Buyer’s Sale Contingency and Active Under Contract

On April 20, 2016, the SWMLS Board of Directors voted to approve the most recent revisions to the SWMLS Rules and Regulations.  The approved Rules and Regulations were noticed on April 26, 2016, and may be found here.  The red-lined version showing the revisions made may be found here.  These changes will be effective starting May 23, 2016.

Buyer’s Sale Contingency

Prior to the most recent changes to the SWMLS Rules and Regulations, listings with a Buyer’s Sale Contingency (also referred to as a Right of First Refusal) were placed in Active Under Contract status.

Following research and discussion by the SWMLS Policy Committee and the Board of Directors, a vote was carried to allow listings with a buyer’s sale contingency (reference RANM Form 2503) to be allowed to be marketed in Active status, with LO/SO remarks stating that a buyer’s sale contingency is in effect with a ____ hour contingency removal period.

If a listing broker has a listing which has an accepted offer, however, there is a buyer’s sale contingency in effect with a properly disclosed contingency removal period, the listing should be kept in Active status with appropriate notes in the LO/SO remarks (NOT the Marketing/Advertising Remarks) stating that a ____ hour Buyer-Sale Contingency is in effect.

Furthermore, the Buyer’s Sale Contingency should no longer be placed in Active Under Contract status, as this is no longer an acceptable contingency for Active Under Contract.

As a listing agent, it is important that the contingency removal period (or Contingency Date) matches that of the executed RANM Form 2503.  Should the buyer’s sale contingency expire, and the seller has not been notified by the buyer that the contingency has been removed, nor has an additional buyer’s sale contingency been executed, the buyer’s sale contingency LO/SO remarks should be removed.  Should another buyer’s sale contingency be executed, that information shall once again be placed in the LO/SO remarks.

Additional information in regards to the appropriate use of the Buyer’s Sale Contingency may be found on RANM Form 2503.

Active Under Contract

In addition to the changes to Buyer’s Sale Contingencies, the SWMLS Board of Directors also approved changing the existing Active Under Contract status into three separate statuses.  The new statuses will be:

  • Active Under Contract – Bank Owned
  • Active Under Contract – Short Sale
  • Active Under Contract – Relocation

For any of these statuses listing agents will still be required to state "Under Contract Taking Backup Offers" at the beginning of the public remarks.

To reiterate, the only acceptable contingencies to be used for any Active Under Contract Status are Contingent on Lender/Bank Approval for Short Sales and REO properties, and Contingent on Corporate/Relocation approval.  Buyer’s Sale Contingency is no longer an acceptable contingency for Active Under Contract.

How Can I Prepare for The Change?

If you currently have a listing that has a Buyer’s Sale Contingency, make sure that it is in Active status.  Also, ensure that you have appropriately disclosed the buyer’s sale contingency with a ____ hour contingency removal period in effect in the LO/SO remarks.  The contingency removal period entered in the MLS should match the information on the executed RANM Form 2503.

On May 23rd Flexmls will automatically ‘map’ listings based on the information entered into the contract information at listing input.  If you have a listing in Active Under Contract status, check to make sure you have appropriately selected the contract information in the Main Fields in listing input.  If the home is Active Under Contract - Short Sale, ensure that [Short Sale] = Yes, and [Bank Owned] = No.  The opposite would be true if the listing is Bank Owned.  Therefore, any listing with [Short Sale] = Yes will automatically be mapped to the new Active Under Contract – Short Sale status.

If the listing shows [Bank Owned] and [Short Sale] both = No, Flexmls will map those listings to the Active Under Contract – Relocation status on May 23rd.  If this is incorrect, the listing broker should access the listing and make the appropriate changes.

If the listing does not have one of the acceptable contingencies for Active Under Contract the broker should ensure that the appropriate status is being identified per the contract type.