"Shopping an offer" refers to the practice of informing other potential buyers, or their agents, of the price and/or terms of an offer that has been made on one's own listing.

So, what do you think? Is it unethical for an agent to "shop" an offer that has been made on one of his listings?

Suppose you are the listing agent for 123 Elm St. It is listed for $500,000. An offer to purchase is made, and presented through you to the seller. The price offered is $475,000. The buyer will put 20 percent down and obtain conventional financing. The length of escrow is to be ninety days. The seller has three days to respond. While he has expressed to you that he could live with this, he had really hoped to receive more money and to have a shorter escrow. Yet, it has been made clear that $475,000 is the buyer's limit, and that he can't complete a shorter escrow.

Now, suppose also that three other agents have shown the property and have informed you that their buyers are very interested in the property. You might "shop" the current offer in the following way. You could call the other agents, describe the offer to them, and let them know that this is what the other buyers would have to beat if they want the house.

Probably most often, the focus of offer shopping is on price; but it can emphasize other aspects as well. Offers may be shopped relative to length of escrow, method of financing, contingencies, etc. For example, "If your buyer can match this, but come up with a shorter escrow, I think he can get it."

It is pretty clear why an agent would shop an offer. It is seen as a way to try to get a more satisfactory deal for the seller. Of course, whether or not it really is a good way to obtain a better deal is a matter of debate. Such a debate occurred at the November meetings of the National Association of Realtors® in Orlando, Florida.

A proposal had been made requiring that buyers be notified that their offers might be shopped. Specifically, a new NAR Standard of Practice was proposed, "Realtors® assisting purchasers in formulating purchase offers shall advise those purchasers that the existence, terms and conditions of any offer they make may potentially be disclosed to other purchasers by sellers or by sellers representatives except where such disclosure is prohibited by law or regulation."

This proposal provoked heated discussion, the focus of which really wasn't on the proposal (to advise buyers of potential offer shopping), but on the practice of shopping offers itself.

Some made the argument that offer shopping ought not to be done, perhaps not even allowed, because it is unproductive. This is sometimes true. Offer shopping can turn out to be counter-productive, because sometimes other buyers will say, "I don't want to get into a bidding war. I'll just wait and see what happens." In light of that possibility, the decision to shop an offer is a judgment call, just like most business decisions.

Some simply found the practice of offer shopping to be distasteful, a bit unseemly; and they objected to it strongly because of that. "Doing that [shopping the offer] would create an auction atmosphere!" they said. To which more than a few Californians – by now at home with bidding wars for property -- were inclined to respond, "So?"

Others expressed strong, if inchoate, sentiments that offer shopping was immoral or unethical. There arguments tended to rely on the notion that a buyer's offer is, or should be, confidential.

More heat than light was generated by the debate, and finally a decision was made to postpone the matter, referring it back to the Professional Standards Committee. One can expect that the ensuing discussions and recommendations will expand beyond the scope of the original proposal to the practice of offer shopping itself.

Meanwhile, Realtors® and consumers with opinions on the matter should make them known to local NAR Directors. Any opinions out there?

Published: December 21, 2004

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Bob Hunt is a former director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .