Is it ethical for a realtor to also be the attorney & a member/employee of the company that owns the property?

Asked by Dee VM, North Plainfield, NJ Sun Oct 26, 2008

After I put in a bid for a property in NJ, I found out that the listing agent/realtor is also the attorney and is a member/employee of the company who owns the property. Is this an ethical practice? Also, they have never bothered to list the property as "under contract". Is this also an ethical policy?

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William Leigh…, , New Jersey
Mon Oct 27, 2008
DeeVM: I would say that a Realtor could be an attorney at any time. As far as listing a property that he/she has an equitable interest, it should be disclosed.

As far as listing a property as under contract, MLS systems like to have accurate information so people don't go on wild goose chases but if you are looking for some lever to pry your way into a deal, forget it. I had a sale that was listed as available until it closed, because the attorneys rejected the contract. While the sales agreement was never complete, the sale went on as scheduled, because the parties ignored the sales contract and just transferred the property. The point is that “under contract” doesn't always get done until the last minute, for good reason or ill.
0 votes
Gina Suriano…, Agent, Scotch Plains, NJ
Sun Oct 26, 2008
Listing agents must disclose beforehand that they have a legal interest in the property they have listed. I do think this is legal issue, not just an "ethical" one. Our Errors and Ommissions insurance often does not cover an agent if they list their own property. As far as "under contract", most MLS's have very specific guidelines on when a property must be entered into the mls system, as well as the time frame for reporting "in attorney review" and "under contract. If this property is in North Plainfield, then most likely it was listed with the Garden State MLS. You can contact them for their rules and regulations, and see if their rules were violated. The agency could be imposed fines if it is found to not have reported the status in a timely manner.
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Larry Sarlo, Agent, North Wildwood, NJ
Sun Oct 26, 2008
I will also add many offices such as Weichert, I work for...and others as well.... Will not allow thier agents to list their own properties but full disclosure must still exist as to the ownership. Where this is merely a protective matter in place for the company, full disclosure must be present upfront.

If you feel there is a problem with the purchase you should seek legal advise.
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Kenneth Verb…, Agent, PRINCETON, NJ
Sun Oct 26, 2008
This should have been disclosed before you made offer. Ethically they are supposed to let agents know if the property is under contract. Check with your agent as many mls have a field where it indicates the broker has an ownership interest. Is it possible your agent didnt notice this?
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terryriw53, Agent, Sewell, NJ
Sun Oct 26, 2008
Yes, but they should have disclosed it before hand. This is a requirement in the State of NJ that before any financial information is discussed or exchanged that you should have been informed of the other agents relationship. This is eay to prove...they should have given you a copy of the Consumer Information Sheet and also had you sign a copy. If you feel that you were defrauded because of this you can file a complaint with the NJ Real Estate Commission.
The other problem you state where you say they have never changed the status of the property to "under contract" is one that many of us professional agents run into with other agents. We look for properties for our clients and when we find one that they like, we call and are told that it is under contract (or even worse...days away from going to settlement) it can be very frustrating. When I complain to the agent about this they ALWAYS say that it is someone else's fault (usually some "assistant"). I don't quite understand why they do this except to get other agents to still show the property and MAYBE get better offers. I don't think that they can get any other buyers because the property will still show up on other web sites and Realtor.com until the status changes to Settled.
In summary, the answer to your first question is yes, but they must disclose it to you and show that they have. And the answer to your second question is that it depends on the circumstances that the agent doesn't change the status (contigency sales generally will not result in chnages to pending or under contreact, etc.).
Web Reference:  http://www.i-teamhomes.com
0 votes
Larry Sarlo, Agent, North Wildwood, NJ
Sun Oct 26, 2008
IT is ethical but must be disclosed at all times... All times!
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