Real Estate Agent Question

So on the weekend I inspected a house and put an offer of $442K. Next day agent calls and says that he has 7 offers and is this my final and best offer? He also said that he do have offers more than my offer but under the law he cant say any more and he wont give any more chances to increase the offer. So I increased my offer to $451k. In the evening got another call saying that some one else has put an offer of exactly same as mine with same price and conditions and would i like to increase my offer to $455k? I said maximum i can do is $452k. Got a call back after 10 minutes saying that my offer is accepted with the condition that i sign the contract that night. I agreed and the agent said that he will bring the paperwork to my house and get it signed.

Now after about half and hour of this phone call i got another call from the agent and he said:

"This is a courtesy call just to let you know that when we were calling the other people to let them know that the property is under contract now, one of the interested parties have offered $10k more than you without any B & P clause. So the owners have now decided to go with that offer. I'm really sorry to make this phone call, but as you know nothing is final and legal until the contract is signed. I hope we can find you some other property"

Now i want to know that is it ethical and legal for a RE to do this??

 

Yes legal. Yes ethical - agent has a duty to get the most money for his client. It is a sales tactic - known as a dutch auction.

 

I would have withdrawn my offer (of $442k) when the REA called and asked for my best and final offer. I would have ended the call with a request for the REA to contact me if none of the other offers were successful as I am still interested in the property.

One must always remember that "the next good property is just around the corner".

 

It's legal and in the best interest of their client, but I wouldn't call it ethical.

 

Typical occurrence for a property that has a high demand. I wish they were all like that.

 

Especially when I am selling mine .

 

Another option would have been going to a 'Buyers Deceleration', this involves all interested parties given a deadline to submit their final and best offer. All offers are kept confidential and taken to the vendor for consideration. No negotiation is done past this offer. It is not a perfect system (nothing is) however, I have found it to be the fairest for all parties involved and it can and does achieve great prices for the vendor.