CMLS Legal Section Council: Transferring A Listing Within The MLS
Tuesday, March 7, 2017
One of the golden rules that all REALTORS® seem to know is that the broker owns the listing. So when a listing agent leaves a firm, there is sometimes some angst over what happens to the listing. There are legal, technical and logistical issues when a REALTOR® leaves one company and transfers to a new one.
This article looks at it from the MLS perspective and what precautions might be taken and what policy options are sometimes used to address how a listing gets transferred.
The facts which usually prompt a transfer of the listing involve a listing agent leaving one firm and joining a new one. Before a discussion can occur about transferring the listing the agent needs to ascertain, and have certainty, if the listing is eligible for transfer.
The listing is an asset of the firm, therefore permission is required from the broker before any transfer can occur. If the broker has a policy that they will not release the listing then the conversation ends, the broker is under absolutely no duty to release the listing if they choose not to.
Keep in mind that a broker who retains the listing must either take personal responsibility for servicing the listing or reassign the listing to another agent in the firm. It is highly recommended a personal discussion occur with the seller immediately so there is no confusion about who their new contact is regarding selling their property. Not all sellers are going to welcome a new listing agent, therefore some brokers arrange for a transfer of the listing to a new firm. Before that can occur, however, several steps are necessary.
When someone discusses “transferring a listing” what they really mean is “assigning” the listing.
The transfer is simply the technical component of moving it within the MLS system. All listing contracts are assignable unless they state otherwise, so it is important for listing agents to read their contracts.
In the event a broker opts to let an agent take a listing to their new firm (sometimes there is a financial agreement that goes with it like a referral or some kind of commission split), then there are two steps which need to be followed. First, what must a broker do to legally assign the listing. Second, how does the listing get transferred within the MLS?
The first one is easy: The first broker simply needs to execute a letter of assignment assigning the listing to the new broker. The next step is to approach the MLS and ask them to transfer the listing within the MLS to the new broker’s name.
All MLSs vary regarding how this is handled. Some MLSs require a specific form and a copy of the assignment to complete the transfer. Other MLSs are extremely cautious about making transfers and require that the listing be cancelled by the original broker and then reentered under the new broker’s name.
Legally, the MLS cannot require a broker who is the recipient of the listing to execute a new listing agreement with the seller. It is highly recommended a broker not execute a new listing agreement as the seller may refuse and if the first broker terminated the first listing agreement there is no protection for the second broker.
What the above information is intended to illustrate is the difference between technology and legal requirements to transfer a listing. The best action is to first handle the legality and then handle the technical issues. In the event you are unsure about how to proceed contact your broker and the MLS.
This article was by written and submitted by Margy Grant, vice president/general counsel of Law and Policy, Florida Association of REALTORS®, on behalf of the CMLS Legal Section Council.