I received a call today from a house shopper who was looking at homes online. When I informed her that the house she was calling me about (not my listing) was a short sale she got upset and asked me: “Don’t Albuquerque Realtors have to disclose when a house is a short sale?” My answer was “no, not really.”
Well, I’m not sure my answer was exactly correct. In fact, NM real estate licensing law dictates that brokers are required to make “disclosure of any adverse material facts…about the property or the transaction” to consumers. In my opinion if a house is offered for sale as a short sale it is clearly an adverse material fact. The problem is that Southwest MLS rules do not require that brokers identify short sale listings to consumers in the public remarks section of the MLS, but only in the LO/SO (Listing Office/Selling Office) section that consumers don’t have access to. Only the public remarks section, not the LO/SO remarks, are sent out to consumers through the data feed that websites like Realtor.com, Trulia, Zillow, and individual agent websites use to display Southwest MLS data. Consumers don’t get any indication the house they’re looking at is a short sale.
If licensed brokers are required to disclose “adverse material facts about a transaction,” why don’t they have to disclose it to consumers online? It sounds like a violation of license law and a large gap in Southwest MLS policy to me.
OK REALTORS®, still think that you don’t have to disclose if the transaction is a possible short sale? Well how about Article Two of the Realtor Code of Ethics that we are all supposed to adhere to? Article Two says: “REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.” There are at least two pertinent facts about short sales that I think need to be disclosed. First, that short sales typically take considerably longer to sell because of the tedious and time-consuming bank approval process, and second, that banks are under no obligation to accept even full price offers. Frequently they don’t. Those sure sound like pertinent facts to me.
I can already hear some agents saying that short sales are starting to close with more and more regularity. However there is no statistical evidence of this that I’ve seen yet, and no one watches Albuquerque Real Estate Stats more closely than I do; there is only anecdotal evidence and it is what I consider to be nothing more than wishful thinking on the part of brokers.
Judging by the number of Albuquerque real estate brokers that do not disclose that their short sale listings are exactly what they are, many of my fellow brokers do not agree with me on this issue. OK, perhaps I should give them the benefit of the doubt, they probably haven’t given it that much thought. They are just trying to sell houses and don’t worry about esoteric things like honesty and integrity and ethics. It’s these same brokers that are thankful that there is no MLS policy that forces them to reveal their listing, which at first glance looks like a great deal, but in reality is a short sale and a longshot to successfully close. Why? Because as several agents who I believe to be a little short in the honesty and integrity department have actually told me, listing a short sale is a great way to find buyers for other properties that you can actually sell (betcha they don’t tell their seller clients that).
Brokers, please don’t mislead the public. If your listing is a possible short sale just say so in the public remarks section of the MLS. It may not be required by Southwest MLS policy, but the way I read NM licensing rules and the NAR code of ethics it’s the right thing to do. Tell consumers up front. When you don’t it diminishes our credibility and our reputations as Realtors.
Just the cold hard truth as I see it. The opinion expressed in this post is mine and mine alone and is not the opinion of my qualifying broker or of RE/MAX.
***Please comment, I want to hear your opinions. Tell me why you think I’m wrong.***