February 8th - 2003

Tell all about MLS

Explaining both the benefits and the requirements of MLS to your clients up front can prevent misunderstandings and concerns later in the real estate process.

Explaining both the benefits and the requirements of MLS to your clients up front can prevent misunderstandings and concerns later in the real estate process.

There are many benefits to having a property listed on MLS, but along with those benefits, there are certain restrictions and requirements such as having to report sales; or the fact that the seller can't refuse to deal with a certain member of the board. These are the elements of MLS that make it such an effective marketing tool and a cooperative system of selling properties.

Board rules

Real estate board MLS rules say that you need to report sales -- conditional and/or firm -- when they occur. The boards then post that information. Problems arise, however, if the seller can't live with these requirements and a REALTOR is caught between his or her rules and the seller's instructions.

The solution is to make sure your client fully understands the requirements of MLS right from the beginning. If for example, your client does not want information about the sale posted, you may need to discuss an exclusive listing.

The following excerpts from a board disciplinary panel decision (and subsequent appeal) provide a good example of what can happen when MLS requirements are not fully explained.

The REALTOR in this case appealed the panel’s decision that he was in breach of the board’s MLS rules. The basis of the appeal was that there was a conflict between agency law and the board’s MLS rules.

The appeal panel did not agree with the appellant’s position and denied the appeal. “Agency law does require REALTORS to abide by the lawful instructions of their clients. Equally so, an MLS listing carries with it certain obligations, together with all of its benefits. If a seller does not want to have the listing of his/her property subject to the various MLS rules which are needed to make the system the effective marketing tool that it has become, then there is another choice for the seller – to enter into an exclusive listing agreement with the REALTOR.

The solution to the appellant’s perceived inability to follow both his client’s instructions and the MLS rules would have been to advise his client of the choices available.

There are other requirements for MLS listings including: no other REALTOR can be excluded as a potential cooperating broker; and the listing must be submitted to the board within a certain time period from its commencement date. All of these rules make the MLS system the desired method of selling for most members of the public.”

How to avoid problems

The easiest way to avoid any misunderstanding is to inform your client as soon as possible. When you are discussing the details of the listing agreement with your client, you can easily cover the relevant MLS rules as well. Section 11 of OREA’s standard form listing agreement does provide for the seller to acknowledge that the board will be able to use all of the information in the gathering of its statistics, making it the perfect time to explain the MLS requirements.

Disclosure is such an important element of a real estate transaction. The better informed your clients are up front, the less likely you will run into problems.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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