Is it ethical or legal for agents to list REO properties purposedly low to create a bidding war?
There is a fine line between purposedly posting low listing price to generate interest and the normal ups and downs of real estate transaction. The former is really a questionable practice from my perspective. I bought 2 houses before and understand the competition and negotiation involved. I went through the effort to discuss and prepare an offer with my agent, put down the ‘earnest’ money, get myself preapproved. All these take time and effort. The assumption is there is good faith on both sides. If it turns out that the bank has a different bottomline all along, I don’t see how this can be ethical. Maybe this is how business is conducted nowaday. In bank’s defense, it’s not just them. I heard many buyers/investors throw everything at the bank and see which one sticks. Well, sooner or later more people will get accustomed to how the game is played and adjust accordingly. Then new tricks will have to be invented. Not sure this is good for the real estate profession.
