New Requirements for Short Sales in the MLS

Having an offer on a short sale listing accepted immediately after it is listed is no longer an option if it is a property that would require approval by Fannie Mae according to recently announced requirements for Fannie Mae short sales listed in a multiple listing service (MLS). Starting August 1st, each new short sale listing must maintain an “active” status for a minimum of five days; and that time-frame must include at least one weekend. Freddie Mac announced similar guidance for Freddie Mac short sales.

It’s important to remember two things: that the new rule only affects Fannie Mae and Freddie Mac short sales; and, though it directly affects sellers, it also indirectly impacts buyers’ offers.

Fannie Mae wants short sale listings to be marketed in a manner that allows the market to see the listing.  Properties Fannie Mae owns (REO listings) reflects the same philosophy since Fannie Mae won’t evaluate offers until the listing has been in the MLS and “active” for at least three days.

While an offer can be presented at any time after the property is listed, the seller cannot accept any offer until the required five-day marketing period ends. A buyer’s agent could, for example, submit an offer on the first day a home is listed. However, they there should be wording in the contract that gives the seller five days to accept the offer if the property must follow Fannie Mae or Freddie Mac’s rules.

Under Fannie Mae and Freddie Mac’s rules, the short sale property must be listed in an MLS that covers its geographic area where the property is located.  For instance, a property located in the Florida Keys must be listed with the local Florida Keys MLS.  Listing a property in the Florida Keys with the Miami-Dade MLS may not be acceptable, since the Florida Keys is not the primary geographic area for that MLS.