A very important MLS rule states that the SELLER of a property listed on the MLS must be the OWNER. This may seem obvious, but circumstances often arise where it seems reasonable to assume ownership, and such situations can easily lead to trouble.
For example, frequently in cases of new construction, the CONTRACTED BUYER will approach an agent to list the property. However, until the CONTRACTED BUYER actually closes, the DEVELOPER owns the property, and the property cannot be listed on the MLS on behalf of the CONTRACTED BUYER.
Another re-emerging instance involves a 3rd party (often an investor) wanting to list a home for sale as soon as they enter into a sales contract on the property. Typically the goal of the investor is to find a buyer to purchase the property and have a simultaneous closing – also known as “flipping.” Likewise, an “option” to purchase (recorded or otherwise) is not accepted as “ownership” by MFRMLS. Imagine the trouble that could arise if there were two contracts and three parties entangled in a real estate transaction when the first contract fails to close, or the potential of a foreclosure if a short-sale is a part of the picture. It’s easy to see the legal implications that could expose both brokers and the MLS to liability. This rule was adapted in July of 2007; in light of an increase in inquiries from members, this friendly reminder of the rule seems prudent.