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Conditional Sales Disclosure

Why does the MLS Show ACTIVE, when a property is Conditionally Sold?

A number of clients have asked us why a property shows Active on the MLS when the property is Conditionally Sold?

This seems Crazy to us also. Here is the reasoning as explained in a Calgary Real Estate Board Article From January 2014

WHAT IS PENDING STATUS?

You are selling your home. There are myriad of papers placed in front of you to sign, and at least as many decisions to discuss and make with your REALTOR®. It can be daunting, but it doesn’t have to be.

One of the decisions that you will have to make with your REALTOR® is how to list your home on the Multiple Listing Service (MLS®) System once you have an offer.

Listings on the MLS® System can be listed under the following statuses until your home is sold:

P-Pending
U-Under Contract
A-Active

When your REALTOR® presents the options to you, it will be in the form of a Conditional Sale Disclosure Instruction form. This form must be signed by the seller and retained by the REALTOR®.

There are various reasons why a seller makes a choice to list their home a certain way once an offer has been made, regardless it is the duty of the seller’s REALTOR® to abide by the seller’s choice. So, what does this all mean?

PENDING

As a seller, if you choose to list your conditional sale as P, or Pending, your REALTOR® will respond to inquiries stating that your home is conditionally sold. It will be stated on any signage and on the MLS® System that your home is conditionally sold and your REALTOR® will discontinue marketing the home until the conditional sales’ conditions are met or until the time that the offer is cancelled.

UNDER CONTRACT 

Should you choose to list your conditional sale as U, or Under Contract, your REALTOR® will disclose that your home is conditionally sold, however the listing will remain listed as A, or Active, on REALTOR.ca, but as U on the realtor MLS® System. Your home will continue to be marketed for sale by your REALTOR®.

ACTIVE

The final option is to continue to list your home as A, or Active, on both REALTOR.ca and the MLS® System. Your home will continue to be marketed for sale. You will have Four options to direct your REALTOR® on how to disclose the conditional sale to inquiries.

1. Disclose the conditional offer if specifically asked

2. Disclose the conditional offer when a showing is requested

3. Disclose the conditional offer in the private remarks on the MLS® System

4. Do not disclose the conditional offer (the REALTOR® and brokerage are still legally required to be truthful and will respond to inquiries stating that you, the seller, have instructed your REALTOR® not to answer that question.)

Every seller will have their own reasons for making whichever choice they do. For a buyer this means that, although your REALTOR® will do what they can to ensure that you are not shown homes which may not be available, it could happen.

This form and the choice of status are meant to protect you as a seller, but also to protect a REALTOR®. Your REALTOR® will be clear on what information you would like to disclose, and when you would like them to continue, or stop marketing and showing your home.

Click here to Read the Original Calgary Real Estate Board Article

With this many options, it may seem a bit confusing for buyers and the Realtors that represent the Buyers.

So each time a Buyer’s Realtor requests a showing on a property that is Active on the MLS System, the realtor must ask the Question ” Is this property currently Under Contract? ” and the Seller’s realtor will respond accordingly. Then the Buyer’s Realtor will inform the Buyer as to the Current Status of the Property, and the Buyer can then Determine whether or not they would like to view the property.

If the Buyer views the property and likes it, they then have 2 options

  1. Buyer may write a back up offer (Conditional to the first offer failing)
  2. Buyer may wait till the first offer fails and then write an offer.

Here is a copy of the Actual form that the Realtors present to the Sellers

Conditional Sales Disclosure

Conditional Sales Disclosure

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