With distressed properties, there can be confusion about when the offer is "accepted." The seller is still the legal owner of the property in most cases, and must be the first to accept an offer. Yet the lender also must approve or agree to the transaction, since it's being asked to take less than what's owed on the mortgage. When the seller accepts an offer under these conditions and a contract is formed, the offer is "accepted," though it has at least one unresolved contingency: the lender's approval of the short sale.

Many MLS systems require listing brokers to change a listing out of "active" status upon the acceptance of any offer-including offers subject to lender approval, as in a short sale. Whether, and when, the listing status must be changed is a matter of MLS rules.

Regardless of what the MLS requires, though, the Code of Ethics Standard of Practice 3-6 requires that accepted offers be disclosed: "REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation."

Even if your MLS doesn't require the listing to be reclassified as "pending" or "under contract" upon acceptance of an offer in a short sale, if a cooperating broker contacts you about showing that listing to a prospect, you're required to disclose the accepted offer.

You should consult with your seller client about what else to disclose about the accepted offer. It may be in the seller's interest to disclose that the offer is contingent on lender approval as a short sale. This may encourage the cooperating broker to show the property, perhaps leading to another offer. If another offer is submitted, Standard of Practice 1-7 requires that you advise the seller to seek legal advice unless the offer is contingent on the termination of the accepted offer.