Five Options to Consider When a Real Estate Agent Violates the Rules

Five Options to Consider When a Real Estate Agent Violates the Rules
A broker is responsible for the acts of their real estate agents, so if there is a breach of ethics, contacting the broker is definitely an option. (fizkes/Shutterstock)

Dear Monty: Can a real estate agent from the brokerage agency of the seller outbid your offer without it being considered a conflict of interest in New Jersey?

Monty's Answer: There is limited information in your question, so it is impossible to advise you on your situation. There must be a lot more known about the circumstances.

The information you need to know may be difficult for you to gather. You have data in your possession, such as a purchase offer, emails, possibly texts and notes you scribed.

You likely don't have the documents from the agent you state that outbid you. The broker is responsible for the acts of their agents. Have you contacted the agent's broker?

Here is some language from the New Jersey administrative code.

Section 11:5-6.4 Obligations Of Licensees To Public And To Each Other

(a) All licensees are subject to and shall strictly comply with the laws of agency and the principles governing fiduciary relationships. In accepting employment as an agent, the licensee pledges himself to protect and promote, as he would his own, the interests of the client or principal he has undertaken to represent; this obligation of absolute fidelity to the client's or principal's interest is primary but does not relieve the licensee from the obligation of dealing fairly with all parties to the transaction.

An Investment Of Time And Energy

Instead of advice, here are some options for you to consider:

No. 1: Chalk it up to a learning experience. Pursuing the matter will require a fair amount of your time, money and energy. Letting it go is an option many people in similar situations will take. There are also many people who have the time and inclination to invest the time and work to ensure the agent won't take advantage of others.

No. 2: Contact the agent's broker. Contacting the broker may be a good option if the broker is ethical. There also can be a mindset on the broker's part to defend the agent. On the other hand, the broker may have been waiting for an excuse to get rid of the agent. It wouldn't take long to find out.

No. 3: Attempt to buy the home directly from the agent. The real estate industry typically fears the regulators. If the agent has broken the law and you push back, would the agent trade your silence for the house? This tactic is one I would consult with your attorney for guidance before using.

No. 4: Seek a legal opinion. Your attorney may have other options knowing the New Jersey law that is beyond my own limited knowledge of New Jersey law.

No. 5: File a complaint with the New Jersey Real Estate Commission. If you want to take this action to protect other customers from the same fate, the regulators will gather the information you don't have in their investigation. They protect consumers and enforce the rules to protect the public from licensees that do not know or follow the rules.
Finally, over a year ago, an article described the cutthroat New Jersey market. Sometimes, it helps to know you are not alone.
Richard Montgomery is the founder of PropBox, the first advertising platform to bring home sellers and buyers directly together to negotiate online. He offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or
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