C.A.R. MLS/Computer and Business Technology Committee Mandatory Reporting of Sales Price
This Issues Briefing Paper is for Study only and has not been approved by the MLS/Computer and Business Technology Committee, Executive Committee, or the Board of Directors.
Over the last year, there has been some debate related to an MLSs ability to require participants and subscribers to report not only the sold status but the selling price of a property. This paper will bring the Committee up to speed on the latest developments regarding this issue.
C.A.R. directors may recall that at the beginning of 2011, in light of certain communications which had been exchanged between NAR and a couple of local California AORs, C.A.R. had developed concerns that NAR might be moving to weaken an MLS’s right to mandate the reporting of a selling price. The requirement to report not only the sale but also the selling price of a listing has been in place in the C.A.R. Model MLS Rules (and likely in most local MLSs) for years and consistently approved by NAR. Since the compilation of sold data is a significant MLS function that participants rely on for determination of market value and comparables, in January of 2011, C.A.R. voted to advocate at NAR for an MLS’s right to mandate the reporting of sold prices in the event NAR was inclined to limit it.
This issue was raised at NAR’s annual meeting in November 2011, and the position C.A.R. and others sought carried the day. NAR expressly amended its MLS policy to allow an MLS to mandate the reporting of sales, including sales price. Since the C.A.R. Model MLS Rules already require the reporting of a selling price, no C.A.R. Model MLS rule changes are needed to implement the new NAR revision of its policy. The text of the applicable C.A.R. Model MLS Rule (with pertinent portion underlined) is set forth below:
10.2 Reporting of Sales. Listings with accepted offers shall be reported to the MLS or input into the MLS database by the listing broker as “pending” or “back-up” within 2 days after the acceptance unless the negotiations were carried on under Section 9.1 (a) or (b), in which case, the cooperating broker shall notify the listing broker of the “pending” or “back-up” status within 2 days after acceptance, whereby the listing broker shall then report or input the status change to the MLS within 2 days of receiving notice from the cooperating broker. The listing shall be published on the MLS as “pending” or “back-up” with no price or terms prior to the final closing.
Upon final closing, the listing broker shall report or input the listing in the MLS as “sold” and report the selling price within 2 days after the final closing date unless the negotiations were carried on under Section 9.1 (a) or (b), in which case, the cooperating broker shall notify the listing broker of the “sold” status and selling price within 2 days after the final closing date, whereby the listing broker shall then report or input the status change and selling price to the MLS within 2 days of receiving notice from the cooperating broker. Listings which were not input into the MLS as a result of the seller’s instructions may be input into the MLS “sold” data at the listing broker’s option.
Preceding the submission of a listing into the MLS, listing brokers obtain authority from sellers to submit a listing to the MLS and report this information to the service by virtue of their listing agreements. C.A.R.’s standard form listing agreements contain provisions stating that “All terms of the transaction, including financing, if applicable, will be provided to the selected MLS for publication, dissemination and use by persons and entities on terms approved by the MLS” and that “Seller acknowledges that Broker is required to comply with all applicable MLS rules as a condition of entry of the listing into the MLS and Seller authorizes Broker to comply with all applicable MLS rules. MLS rules require that the listing sales price be reported to the MLS.” When the terms of the listing agreement and the C.A.R. Model MLS rules are taken together, a seller availing himself of the MLS agrees that the sales price of the property will be reported to and disseminated by the service, and the listing broker submitting the listing into the MLS must report the sales price or be subject to a rules infraction for failure to do so. This means that partaking in the benefits of the service compels all listings submitted to report sales price information.
That being said, an occasional local MLS has revised the rules of its service to expressly allow for exceptions under certain circumstances when a buyer/seller chooses not to disclose. This dynamic usually seems to occur in very exclusive and high end markets. Such a change remains an allowable prerogative of a local MLS, but unless such an exception has been adopted into an MLS’s rules, the C.A.R. Model MLS Rules mandate the reporting of a sales price for all listings.