I'm currently negotiating a contract for a home via my agent and a listing agent.
As part of the negotiations, the listing agent has disclosed details of another contract that his colleague is the listing agent for, to our agent.
This second contract is for a 'comp' in the same neighborhood. Both of the listing agents work out of the same real estate agency/office.
Is there anything unethical or illegal with 2 listing agents disclosing details of the contracts, and using that as leverage for the sellers NOT to come down in price? There are other comps recently sold or listed which are 20-40k lower.
- LA#1 says to our agent: "I have it on good authority that a similar house around the corner is under contract for XXX"
- LA#2 says the same to the other buyer's agent.
It essentially feels like we're in a bidding war with another buyer on a completely different property. I understand the value of the property is going to be dependent on the value of recently sold comps, but it feels like this is being done on purpose to artificially inflate the sales price.
I just want to add also that maybe this is not a problem, UNTIL the lender does an appraisal? Because the appraisal can only take into account recently sold properties, the aforementioned property (still under contract and not yet closed) would not be a valid comp, and now we're back to the negotiating table if the appraisal is under-list. Presumably in that case, the buyer has better leverage because it's then obvious that the property was overvalued?
So, until it's public record, does the seller have the right to disclose the buyers contract details without their permission? I should also add that it's not required to report a sale for public records, if it's not sold through an MLS listing. (both of these are, I just wanted to point out that it's not always public record, as ended up being the case.)
Finally, I was not looking to come here for any more 'free legal or advice' than anyone else asking questions here. I was simply looking for a little perspective and a gut-check on this particular issue.