Unethical Agent Behavior?

[Andrew Self]

Hello everyone. I am looking for some feedback and advice on a situation that has come up recently. I closed on a multifamily property in Kentucky recently with an agent and had a good experience. I then advised that I was looking for distressed properties to BRRRR. I was driving for dollars, found a property of interest and had him reach out to the listing agent to schedule a walkthrough. I reached out to a local contractor I was familiar with and we all walked the property together. Throughout the walkthrough the contractors along with my realtor made me feel as though the property was really only worth the land it sat on and should be torn down if anything. My agent followed up with me that night and asked if wanted to pass on that property, and I said I did because after the walkthrough and hearing what the contractors had to say it did not seem worth it. 3 days later I see he has it under contract, so I reach out and ask how much he got it under contract for and wtheher the buyers planned to use contractors or do the work themselves on it. He said contractors would be doing the work. A week or two later I find a different property, get it under contract and go walk through it with him. While we were there, he told me he was actually the buyer for that property we walked through a week or two earlier. He also then told me that the contractors I brought in said they could get it move in ready for $50,000, which for the price he got it for and that rehab budget I would have jumped all over that deal. So, now I'm under contract on a different property, and he just listed that one for $50,000 more than he has in it less than a month later. I can't get the sour feeling out of my mouth that he put his best interest over my own and took the deal out from under me. He obviously talked to the contractors I brought in after the walkthrough to get this quote from them, never told me about that discussion or gave me any option or additional info on it. The budget I told him I had was higher than what this would put him all in on this deal. So, now I'm under contract on a different property with him as my buyer's agent and he just listed the one that I feel should have been mine had I known all the variables. I am a new investor and he has multiple properties of his own so he obviously has a higher level of knowledge than myself. What should I do, if anything? I plan to tell him I won't use him anymore after this deal because I can't trust him to have my best interest after what he has done with the other property. Is this something I should file a formal complaint or do anything other than tell him that I can't trust him and cut ties? Any feedback is appreciated.

Yes, I know I told him I wanted to pass. I also know the budget I told him I had and that what he got this property purchased and renovated for was under that budget, so obviously had I known that I would have wanted to buy it. 

[Brad S.]

As a Broker myself, this does seems to reflect multiple violations. Here's what chatgpt had to say.
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1. Agent's Breach of Fiduciary Duty

• If the agent was actively representing the investor as a buyer’s agent, they owed a fiduciary duty — meaning they must act in the best interest of their client.

• Purchasing the same property for themselves — especially without disclosure — is a clear conflict of interest and, in many states, a violation of real estate law unless fully disclosed in writing and approved by the client.

2. Failure to Disclose Material Information

• The agent withheld updated info (a new, favorable rehab bid from the contractor) after the walkthrough.

• That info might have changed the investor’s mind — and since the agent knew it, failing to relay it is a material omission.

3. Misuse of Client's Resources

• The agent leveraged the investor’s driving for dollars lead, and used the investor’s contractor to further assess the deal for their own benefit.

• That crosses a professional line. The contractor relationship and property lead were initiated by the investor.

4. Deceptive Conduct

• Based on the agent’s language during and after the walkthrough ("should probably pass"), it appears they may have influenced the investor’s decision to step back — while already considering the deal for themselves.

⚖️ Real Estate Ethics Perspective

If the agent is licensed (which they must be if they're acting as a buyer's agent), they may have violated:

• Duties of loyalty and full disclosure

• Conflict of interest rules

• Self-dealing prohibitions, if not disclosed in writing

This could be grounds for:

• A complaint to the state real estate licensing board

• A complaint to their broker

• Disciplinary action, depending on state law and evidence

🧠 Lessons & Recommendations for the Poster (or Others Reading)

1. Always clarify up front whether your agent is also an active investor — and if so, ask how they avoid competing with clients.

2. Use a written buyer’s agency agreement that outlines duties, disclosure obligations, and commission arrangements.

3. Keep control over your own due diligence process — including contractor communications, inspections, and leads.

4. Consider exclusive buyer’s agents who don’t acquire properties themselves.

5. Document communication with agents via email/text so there's a record in case of conflict.

📌 Conclusion

The agent in this situation acted unethically, and possibly illegally, depending on the state. The investor may have technically said “pass,” but the agent’s failure to disclose updated info and their own purchase intent undermines the fairness of that decision.

It’s a cautionary tale for new investors: work only with agents who are fully transparent and aligned with your goals — not competing with you behind the scenes.

If you'd like, I can help you write a public or professional comment in response to the post."