Monday
September 1, 2014

Accepted Offers Must Be Disclosed

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Accepted Offers Must Be Disclosed

If you start by identifying whether an offer is accepted or not yet accepted, you’ll understand the different obligations under the Code and MLS rules.

Question: Do I have to tell buyers’ agents that I have an accepted offer on a property I’m listing?

Answer: Yes, the Code of Ethics requires disclosure of accepted offers. Standard of Practice 3-6 provides a well-defined standard on this: “REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.”

This Standard of Practice was amended several years ago to add the phrase “including offers with unresolved contingencies.” That makes it clear that, regardless of the nature of the accepted offer or type of contingency—short sale, buyer’s property sale, or other—the offer must be disclosed to brokers when they seek cooperation.

REALTORS® should distinguish this ethical standard from the rules of their MLS. Local MLS rules may or may not require the change of a listing’s status when an offer is accepted. It is possible that MLS rules may not require the disclosure of an accepted offer in the MLS, but the ethical requirement of Standard of Practice 3-6 requiring disclosure still applies to a listing broker when a cooperating broker seeks cooperation on the listing.

Don’t confuse the requirement to disclose an accepted offer from the rules on when disclosure of unaccepted offers is required. Disclosure of offers not yet accepted is covered by Standard of Practice 1-15. “REALTORS® in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property.” In these cases, the obligation to disclose the existence of the offer arises when the listing broker has the sellers’ approval to disclose and is asked by a buyer or cooperating broker about the existence of offers.

If you start by identifying whether an offer is accepted or not yet accepted, you’ll understand the different obligations under the Code and MLS rules.

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