Sellers can now decide whether or not to have their properties advertised as C/S or pending when they accept a conditional offer. This is due to a rule change just implemented by CREB stating that the Seller can give written instruction not to report the conditional sale until conditions are waived in writing.
What this means for sellers
Previously, once you had accepted an offer, the status of your property was changed to “pending” in our DB and the listing was withdrawn from MLS. This amendment now potentially keeps buyers coming to view the home and increases the chance of a “back-up” offer.
What this means for buyers
The home you’re interested in viewing or writing an offer on might already be conditionally sold. The first sign that the home might already be pending could be during the counter-offer stage when you get your Offer back with a Seller’s condition stating that it’s subject to a previous offer falling through or something to that effect.
Of course Buyer Agents will be asking the Seller’s Rep if the property they want to show or write an offer on is already C/S. Unfortunately, the Seller’s Rep doesn’t have to disclose the home’s status
What this means for those following the daily statistics
Without sellers having to disclose whether their property is pending or not, there isn’t any point in tracking pending sales any longer. Therefore, pending sales figures will no longer be posted on my daily stats page as it won’t be an accurate snapshot of the marketplace.
I don’t like this amendment. CREB gave the following reasons as to why this adjustment was made.
REASON FOR CHANGE
The market has changed and many of our Members and their clients have been in contravention of the existing rules by not reporting pending/conditional sales.
Now there’s a good reason to change the rule! Too many people are getting speeding tickets so let’s get rid of those too. (A bit of a straw man, but you get the point) The phrase “and their clients” makes me wonder whether there were too many unrepresented sellers not following the rules and their Listing Agents didn’t want to be held liable for them…
We sought a legal opinion on this issue and were told that we may be in breach of our fiduciary duties by forcing our clients to disclose confidential information.
“May be in breach.” A definitive answer would have been nice before changes were implemented. Also, while I’m not a lawyer, the listing contract states under Section 15 Use And Distribution of Seller’s Information that the Seller consents to the collection, use, and disclosure for the purpose of…retaining and disclosing any listing and sales information including price…and disclosing such information to other persons.
Doesn’t this consent encompass simply disclosing whether a home was conditionally sold or not? If not, it makes me wonder about other stats that “may be in breach”, such as divulging Days on Market.
Edmonton and other jurisdictions do not report conditional sales at all. CREB® has taken the position that the Seller may instruct our members not to report a conditional/pending sale by completing a CREB® approved form to provide the necessary written instruction and acknowledgement of both parties to the listing contract.
I believe CREB is on the leading edge of real estate boards in Canada in terms of technology & vision, so to compare what other boards are doing is self-defeating.
The Real Estate Act, Section 58 regarding Buyers:
58(a) use best efforts in locating a property in the specified market area that meets the material requirements identified by the buyer and generally to promote the interests of the buyer;
e) fulfill its fiduciary duties of loyalty, confidentiality and of full disclosure of all conflicts of interest that may arise between the buyer’s interests and those of the industry member, sellers or competing buyers;
(n) disclose to the buyer the existence and terms of any competing offers known to the industry member for a property in which the buyer is interested;
It’s impossible to fulfill any of those fiduciary duties because the relevant information in the transaction is not being disclosed in this lop-sided amendment.
Regardless of what I think, these are the new rules and I wanted my readers to be aware of them.