Real estate agents may represent buyers or sellers. They may sometimes specialize in residential or commercial properties. Agents generally need to have a license from the state, regardless of whether or not they choose to join professional organizations, such as the National Association of Realtors (NAR).
Retaining a license is necessary to effectively support clients purchasing or selling real property. Those working as agents must prove they understand the basics of the closing process and the rules that govern real estate transactions. They also need to meet ethical standards, including the ability to pass a background check.
An agent’s license could be at risk if a prior client alleges misconduct due to an undisclosed conflict of interest.
Agents should be transparent with their clients
Many real estate agents have ties to other brokerages. They may even run small businesses where they act as landlords. Anytime an agent might have an outside interest in a real estate transaction, agents generally need to advise their clients of that conflict of interest.
In fact, they may need to step down from representing the client in some cases and refer them to another agent who can provide more neutral support. A seller’s agent typically cannot also represent the buyers in the same transaction. Agents should also avoid scenarios in which they purchase properties through a company they own or help run via a listing where they represent the seller.
Credible claims – or potentially credible claims – of a conflict of interest could lead to a review by state authorities and licensing penalties if authorities uphold that claim of misconduct. Working with a professional license defense lawyer can help real estate agents respond effectively to allegations of misconduct that could otherwise derail their careers.
