This could have been a cash back scheme... just my thoughts. Any time the MLS listing price is raised in the database, it is a red flag.

How about an update steph5280, everyone here is doing alot of guessing.

"Interesting argument that the seller's new price was an invitation for bids, thus terminating any previous offers. Pretty clever and, I would guess, probably right.

I guess the counter would be that the new, higher price was a counter."

I don't think that happened.
The weasel listing agent was approached by the weasel buyer and cut out the buyers agent for their own gain. The weasel seller bumped the price up to cover the weasel buyers closing cost and/or bought down the rate.
ok, I'm guessing, but it's the most likely scenario I can think of.
p.s. RE GA, I had that in my initial resonse and deleted it, hoping for "higher moral ground" by the weasel listing agent, but in todays RE world it's a possibility.

These cash back schemes are rampant. Many times, buyers attend these investor-seminars that encourage this fraud.

During fraud investigations, they look at whether or not the asking priced was raised in the MLS system. For what other reason would the asking price be raised? Legitimate seller concessions would not require such an act.

I was thinking about this too. How you have to represent the seller if youre showing a house with no EBA, otherwise you could be treading into implied agency, etc.

I agree with pikes peak about the reason for the increased listing price in MLS was to most likely allow the buyer to cover his/her closing costs. This is typically not necessary in your standard FNMA type loans, but for a subprime loan some lenders will not allow a higher loan amount than the list price.

Ditto...that's called mortgage fraud. You can absolutely get seller concessions to help cover loan expenses...but there is never any GOOD (read, ethical) reason to raise the list price of a home in the MLS after it is already pending. It's screaming mortgage fraud to me...but hey...what do I know...

I would absolutely report it to your local board and go after your commission (even if you don't get compensated, you might shed light on a bad agent doing underhanded deals (and stealing your customer & food off your table to do it!).

Thank you for all of your responses. I have been away from the boards visiting family for Christmas.

I have learned a very expensive lesson from this experience, one that I will never forget. I am leaning towards going after the listing agent, as I am suspicious this is something he has done before, based on the circumstances.

Before I learned the buyer was my buyer, I was suspicious when the price was raised while it was pending. Also, the agent used for the buyers was from the listing agents office, and had only had her license 6 weeks. If my clients had felt that I was negligent in some way in the negotiations, they would have sought out a more experienced agent. The buyer is a businessman himself.

There is another interesting piece of infomation. The buyer has both this property and his main residence in Texas homesteaded. This is not legal, but it may be an error in the tax records.

Thanks again for your input, I will keep you posted.

Don't take it too hard on yourself. We are in business and at times we have to feel cheated. This in turn gives us a learning experience. Happy New Year and all the best for this year.