Those who have recently undergone the process of finding residential real estate to either rent or purchase likely found it to be an emotionally turbulent experience. Indeed, there was likely anxiety about money and frustration with the waiting game, but also great joy when the offer was accepted and satisfaction when the keys were finally handed over.
Unfortunately, some prospective renters or buyers never get past this initial anxiety or frustration, seeing their attempts to find a new dwelling thwarted by the seemingly unethical practices of a real estate agent.
By way of example, consider a scenario in which a prospective renter or buyer makes an offer and is informed by the owner’s agent that it has been accepted.
Eager to finalize the transaction, the prospective renter or buyer seeks to sign the rental or purchase agreement only to be informed they will need to wait several days. Thereafter, they’re told that they’ve been outbid on the property during the ensuing waiting period and that they can proceed with a counter offer if they desire.
Is this legal?
As it turns out, this is a somewhat common practice, as some real estate agents will look to secure as much time as possible to find a higher bidder. As to its legality, the consensus is that nothing is considered final in the absence of a signed contract or other written agreement.
Is this ethical?
This type of conduct, while perhaps not illegal, is certainly unethical. In general, real estate agents are subject to ethics training at every stage of their career. For example, New York State requires ethics training to be included in the real estate licensing curriculum and for licensed real estate agents to complete continuing education courses addressing this issue.
Do would-be renters or buyers have any recourse if this happens?
Prospective renters or buyers may consider filing a complaint with a local association of realtors or even the New York Department of State’s Division of Licensing Services. Here, fines could be levied, memberships revoked or licenses suspended.
They can also consider taking the time to meet with an experienced legal professional who can examine exactly what happened and definitively determine whether legal action is an option. Indeed, this step could be taken in situations other than that outlined above, including where a realtor has mishandled deposits, failed to perform agreed upon services, failed to disclose problems with the property or misrepresented a rental/sales situation.