Can an Agent Delay Your Bid on a Home?

Question: Through a real-estate agent, I submitted a bid for a home for the full listing price, along with a preapproved-commitment letter from a mortgage broker. The seller's broker has not submitted my bid to the seller because she wanted to hold it until she received a cash bid. She advised the sellers that my preapproved-commitment letter meant nothing, and to look only at cash buyers. To date, she has not submitted my bid to the seller. Is this legal?

Kim: If I were Donald Trump, both of these agents would be rolling their suitcases out to the airport taxi. Fie on that listing agent for not presenting your bid to the seller.  She's doing her clients a disservice. Even though she thinks a cash offer will eventually materialize in this hot market, there's no guarantee that it will.  Nor can she read her clients' minds -- they might be thrilled with a full-price offer, even if they have to wait a bit for the closing (though it sounds as if she at least discussed your offer with her clients, even if she hasn't formally submitted it). Worse, any experienced agent knows that long delays frustrate buyers and damp their eagerness to complete the sale. Should you fall in love with another house while you're waiting and withdraw your offer, the sellers will have lost what could be their best bid.

But double fie on the real-estate agent you've been working with for not demanding that your bid be submitted promptly. And why didn't the agent suggest that you put a time-limit clause in that offer? Stipulating that an offer expires after a certain time period, which can even be a few hours, keeps your contract from being "shopped," as its known in the trade. It also injects a little psychological urgency into the proceedings.  (Indeed, to avoid being sucked into a bidding war in a sizzling market, I once made an offer that expired after only one hour -- and got the house.) In fact, there's nothing stopping you now from withdrawing your current bid and resubmitting it with a time limit.

However, you asked two separate questions. First, is such behavior ethical? Not if the agent is a member of the National Association of Realtors, whose Code of Ethics specifies that offers must be presented to clients "objectively, and as quickly as possible," according to Finley Maxson, an attorney for the trade group. Any Realtor found guilty of an ethics violation, after a hearing in front of the board of directors of the local association, could face anything from a letter of reprimand to a fine of up to $5,000, or even termination of membership. But not every real-estate agent is a Realtor, the trademarked name for a member of the association. Indeed, according to Craig Cheatham, executive vice president of the Association of Real Estate License Law Officials, only about half of the country's 2.2 million licensees are Realtors (to check, and to verify an agent's license status, go to www.arello.com.

Which brings us to your second question: Is this practice legal? The answer varies by state. That complicates matters if you're buying a property in another state, since some states apply laws according to where the property is located, others according to where the "activity" takes place, meaning where the buyer currently lives or the agents do business. But assuming that you, the agents and the property you want to buy are all in New Jersey, the answer is simple: All offers must be submitted within 24 hours. Should you care to file a complaint, call the New Jersey Real Estate Commission at (609) 292-8300, and they'll investigate.

Write to June Fletcher at june.fletcher@wsj.com