Phony "bidding war" - ethical or legal?

[Nate Richards]

Hi Guys, 

I have a question, due to a situation that has me a little flustered to say the least, and quite frankly wondering if the listing agents actions are; (1) ethical or (2) legal. Please let me know some opinions.

Setting - Location NE Ohio, estate sale, SFR listed slightly below market but needing minimal repairs; new roof, int paint, & BA update which would bring it back up to a full market value investment, and advertised as a "Quick possession, estate to be sold "as is" condition".

Situation - I personally inspected and offered via my agent @ 20% below list, all cash, 3 day close, on 1/15 (2 days on market). At that time there were no visitors to the home (snow was undisturbed). On 1/17 we followed up with a status request, and reply that Atty was reviewing the offer. On 1/20 we followed up, and were informed that the Atty was requesting the judge approve a sale below list price, which was also the tax appraised value. Late on 1/21, we followed up again on court status and were informed that there is now another offer, and court review will take 2-3 weeks. Today, 1/22, we were asked to submit a "best and final offer", as there are 2 and soon to be 3 offers. I could have closed on this home by 1/19 if the seller was actually able to do a quick possession as advertised. We requested confirmation that the court has approved a quick sale and that we be informed of their best offer/counter when they are able to sell, and I will respond within 1 hour. They have replied that they do not know how long approval will take and that I need to submit my best. So my questions at this point;

(1) Can you advertise as quick possession if you cannot complete a quick possession, this seems like false advertising?

(2) Is it unethical as an agent to sit on an offer for 7 days in order to create a multiple bid situation?

(3) Is there a way for me to compel a counter which I can accept or decline, especially since my offer was in uncontested for so long?

I have heard that an agent is supposed to disclose the value of the competing offer if you request it, but I am not an Agent. This also seems like unethical and possibly illegal behavior.  In the past I have submitted a "best offer" (a unique one like $123451), and been "outbid" by $1, ($123452 listed on the transfer) on a number that could not have been duplicated by another party, so I know that my bid has been shared with 3rd parties in the past. 

I like the property, but we're pretty close to "all the money", and I would like to get it if possible, which is why I am requesting a counter when sale can be completed. On the flip side I'm frustrated enough that have contemplated just jacking the price up way over list and walking away after 45 days as no deposit is required.