State-Wide Multiple Listing Service has adopted new rules and procedures to regulate equitable listings that will take effect in spring, 2026.  Before those changes take effect, it’s a good idea to familiarize yourself with this type of listing whether you are working with a buyer and/or seller.

What is an equitable listing?

It is a form of listing where the seller holds an interest in the property but does not yet hold legal title to the listed property. 

How does that work? A buyer and seller sign a purchase and sales agreement.  Before closing, the buyer decides to list the property or otherwise find a new buyer to whom to sell or assign the listing. Buyer #1 lists the property and discloses to potential buyers that Buyer #1 does not have legal title to the property.   State-Wide Multiple Listing Service has special listing and disclosure rules that apply.

What are some examples of equitable listings?

▪New Construction: A builder and seller sign a land purchase and sales agreement.  Before closing, the builder wants to get a head start on marketing a lot or lots for new construction. There will be two closings.

▪Flip: An investor and a seller sign a purchase and sales agreement.  Before closing, the investor wants to line up  another buyer to purchase the property after the investor has completed work on it.  There will be two closings.

▪Foreclosure:  The highest bidder at a foreclosure auction signs a purchase and sales agreement to take place in thirty days.  The bidder wants to line up a buyer for a back-to-back closing. There will be two closings.

▪Wholesaling Double Closing:  Similar to a flip, a wholesaler and seller sign a purchase and sales agreement. Before closing, the wholesaler wants to line up another buyer to purchase the property. The wholesaler may have the goal of holding back to back closings on the same day.

▪Wholesaling Assignment:  A wholesaler and a seller sign a purchase and sales agreement. Before the closing, the wholesaler wants to assign his/her interest in the purchase and sales agreement to another buyer. Buyer #2 will pay the wholesaler an assignment fee then buyer #2 is substituted for the wholesaler, Buyer #1 on the purchase and sales agreement. Buyer #2 must meet the same price, terms, and deadlines to which Buyer #1 and the original seller agreed.

Here’s a more detailed example:  A wholesaler agrees to buy the seller’s home for $200,000.  The wholesaler finds another buyer (Buyer #2) who wants to buy the home and charges Buyer #2 an assignment fee of $30,000.  Buyer #2 purchases the property directly from the original seller for $200,000.  There will be one closing.

▪Are assignments legal?  Assignments are legal unless the purchase and sales agreement includes language to prohibit them without the written consent of both the buyer and seller.

For more information about equitable listings, please contact the Legal Department at [email protected].