This is a destructive bait and switch and is unethical.
It forces all parties to deal with an unnecessary conflict initiated by deceit. It takes the property away from potential buyers who would bid up to, or unintentionally over the eventual appraisal, but not as high as the phony bidder.
It takes away the possibility to the seller that someone else, who in good faith bid beyond the eventual appraisal amount,but not as high as the deceitful bidder, might be willing to pay more or at least negotiate in good faith vs. this hostile, take what I give your or stick it, attitude.
If the appraisal doesn’t come in low enough for the bait and switch bidder he or she walks wasting sellers time,emotion and energy. It is an act of deceit against the listing agent and all other bidders and the seller.
The escrow fails where it would have succeeded with an honest buyer and selling agent(buyer’s agent), adding market time and associated expense and cost of depreciation in this market, to the seller and listing agent.
In real estate transaction “time is of the essence”. Deceitful overbidding ignores the significance of this fact to any other involved or interested party.
This is not “good faith” practice.I guarantee that nobody will ever get in trouble for it though… unless there is proof that the selling agent,buyer and appraiser are in cahoots and perhaps also doing it in a “spamming” fashion.
Realtors who are aware of specific instances where this is happening should report it.
Anyone who wants to try to complain about these things can call the local board of Realtors:
This is taken from an SDAR members benefit web page:
19. Professional Standards Hearings/Code of Ethics. When a REALTOR® allegedly violates the Code of Ethics, a complaint may be filed by a REALTOR® or by a member of the general public. SDAR’s Risk Management department handles this process at no cost. 858-715-8000
