There are a lot of questions I would pose to you, if we were able to speak to eachother. And there is a real danger in my passing judgement without knowing all of the facts. I can tell you that, as a Broker, there is no way in the World I would have accepted any offer that was purely "verbal". That is the kiss of death in doing deals, as far as I am concerned. Did the Broker do anything WRONG, in what you said? Not that I can tell. As you imply in your text, the Broker, in this case works for the Seller. If the Seller says, "Do the deal," as a Broker you do the deal! If the Seller likes both the price and the terms - and the terms may be a big part of any deal - then he has the right to accept that deal immediately, regardless of what the Broker advises. For example, if the other Buyer could settle in ten days and the Seller knows you would need thirty, he may have taken a quick deal, rather than trying to negotiate simply a higher price. That is not to say that this was what occured; it is an example of what can occur.
If the Broker did anything specifically wrong, it MAY be in not encouraging his Seller to renegotiate with you, if he thought there was merit. If all other terms were equal, he possibly should have said to the Seller, "Okay, now that we have one offer in our hand, let's see if Jason wants to up his offer." But that is between him and his Seller, which is his Client. Sadly, he really did not owe you anything as I understand the circumstances you paint.
This is a painful lesson for most Buyers: Unless the Broker specifically tells you IN WRITING that he is working for you (the Buyer,) you must assume that he is working for the Seller. If you are paying the Broker, you should have a written agreement that specifically states he is working for you. I am working with a Buyer right now, with whom I have become good friends. There are times when he crosses the line and either tells me too much about his particular strategies, or leans too much on me for advice. I have to continually remind him that I represent the Seller and that we have a written document that attests to that relationship.
Ethically, I do not believe the Broker with which you were dealing did anything incorrectly.