Could be but does not look like it.
The current PPSF is within market.
More likely, it was listed really low and got a ton of offers and then raised the asking at the owner’s request.
I have seen this a lot in the downtown area. Sometimes on new construction (for the last unit or the promotional loss leader) or on shorts (to keep buyers motivated and bidding) or on REO’s (to blast it off the books).

The only way to tell for sure is to wait until close and then check the note. I am doubting (though I could be wrong) that it is 100% financed (which is generally required for cash back fraud).

Considering this was for sale at 3.3M last year, I am doubting it is anything more than a motivated builder short on cash. We’ll see when it closes.