MLS

The real estate profession has become increasingly based in legalities. While a handshake can signify an agreement, the contract is the foundation of the real estate transaction today.

With the increased focus on legal issues, NVAR provides members services in the legal arena. Various articles on current and hot legal topics are provided through the weekly NVAR Online News. In addition, the Legal Information Line is available to members.

There are many real estate related questions that arise often. These FAQs (Frequently Asked Questions) by topic are provided to assist you in finding quick answers.

MLS

Q: The MLS listing stated that the refrigerator and microwave were included. After the close of escrow the buyer discovered that the seller had removed the refrigerator and microwave from the property. The contract did not include these items. Isn’t the buyer allowed to rely on what the MLS says? Are MLS Listings Binding?
A: No, the buyer must look at the contract to see what the parties agreed to in writing. The MLS is considered an advertisement, whereas the contract is a legally binding document. The seller is allowed to take the refrigerator and microwave with him. This misunderstanding can cause a big dilemma for all. A listing agent should fill out the MLS as accurately as they can. If they aren’t sure about something they shouldn’t put it in. On the flipside, as the buyer’s agent make sure your offer specifically lists everything your client wants included as part of the transaction. This will save the parties a lot of time and energy in the long run.
I spoke with an agent recently that had the phrase “furniture included” as part of his MLS listing. He explained to me that the buyer made an offer below the asking price and that his seller accepted. He said because the offer was below asking price the seller wasn’t going to include the “really nice” furniture. The selling agent admitted to me that he didn’t specifically state furniture included with full price offer. He just assumed that a buyer would know if he offered below asking that the furniture wouldn’t be included. I asked him a few more questions. Did the buyer’s agent see this listing through MLS? Did the buyer look at the property with the furniture in it? Did the buyer make the offer based off what he saw? The seller’s agent answered yes to all of those questions.
So, how do you deal with a situation like this where a closing is held up due to the parties arguing over who is entitled to the furniture? Using the same principles as above, I would again say that the MLS is merely an advertisement. However, the buyer made the offer in reliance on the seller saying “furniture included.” The contract when reduced to writing didn’t talk about the furniture. Furthermore, the buyer’s agent left the line in the contract blank under the section entitled Fixtures and Personal Property. The buyer could make the argument that he made his offer in reliance of the MLS listing but again it would be difficult to prove absent an agreement in writing.
Certainly both parties wouldn’t let a transaction fall through over some furniture, right? Wrong. Unfortunately, when both parties think they are right it is difficult to change their minds. As a REALTOR®, you should always do your best to talk with your client and encourage a solution between parties before close of escrow. If there is a misunderstanding it is often in the best interest of all to communicate. And as always never give your clients legal advice. Tell them to consult their own attorney to discuss potential liabilities that arise from cancelling a contract.