Recently, the Federal Trade Commission came out with the Mortgage Assistance Relief Services Rule, also known as the M.A.R.S rule for real estate agents. The intent of the rule is for more disclosures to sellers involved in a short sale transaction. They now require an additional addendum to be present with the listing agreement on all short sale transactions. This addendum actually supersedes the listing agreement. In short, it tells sellers what the total cost of an agent’s services are, that the seller may stop using an agent at any time, that the broker is not associated with the government or their lender, and that their lender may not agree to change the terms of their mortgage. It also goes on to say that the real estate agents are prohibited from receiving ANY upfront compensation from the seller and may ONLY receive compensation when the short sale transaction successfully closes.

While all of this seems like a good idea, on the surface, the FTC has really missed the mark and actually hurt consumers more than they have helped them, and here is why. Since this new addendum supersedes the listing agreement, that means Realtors have no contract with the sellers. Also, according to this addendum, sellers can stop using a realtor’s services at any time. Now, why would an agent spend their good time, effort, and money while knowing full well that they could be dropped by the seller at any time? That’s the whole reason for a listing agreement: so that agents don’t spend a lot of time, money, and effort with no promise of getting paid. This actually will discourage agents from working with short sale sellers.

Next, the question becomes: How many disclosures do we really need for consumers? Right now, we do a short sale addendum for every listing and the buyers of the property must sign it as well. It must be listed in the MLS as a short sale and all advertising must say short sale. Does the FTC really think that yet one more disclosure is going to make a difference? Listen, short sales are hard enough and they are bogged down with excessive paperwork. Let’s not make it harder for agents to help consumers. In fact, I see agents all the time say, “I am done with short sales. They are not worth the time and effort.” When Realtors stop wanting to do short sales because the process has become too arduous, there is only one person hurt in this equation, and that’s the consumer.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at and

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