Do I have to report that my listing is under contract to MLS before the Due Diligence Fee is paid?

QUESTION: My seller accepted an Offer to Purchase and Contract (Form 2-T) on his property yesterday and I called the buyer agent right away to give him the good news. I asked that the Due Diligence Fee check be overnighted to the seller and I gave him the seller’s address. The seller just called me to say that the Due Diligence Fee hasn’t arrived yet. I don’t have any reason to believe that the buyer won’t pay the DDF, but I want to know if I have to change the status of the listing in MLS before the Due Diligence Fee has been delivered. The seller wants me to continue showing the property in case the contract falls through.

ANSWER: The answer to your question is yes. The status of a listing changes when it goes under contract, and your MLS rules require listing agents to report status changes to the MLS within a certain number of hours after they have occurred. According to the unnumbered paragraph appearing immediately above the signature/date lines in Form 2-T, the offer becomes a binding contract on the Effective Date, and it goes on to say that the buyer’s failure to timely deliver any fee, deposit or other payment provided for in the offer does not prevent the offer from becoming a binding contract. The “Effective Date” (defined in paragraph 1(g)) is the date that the offer has been signed by both parties and acceptance has been communicated to the party making the offer. In your case, the seller signed the offer and you communicated that fact to the buyer agent place yesterday. Thus, property went under contract yesterday, the status of your listing changed yesterday, and you must report that to MLS within the number of hours established by the MLS notwithstanding the fact that the DDF hasn’t been paid yet.

Note that a buyer’s failure to promptly deliver the DDF after a contract has been formed gives the seller the right to quickly terminate the contract. You can read about that in a previous Q&A by clicking here.

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