Realtor not truthful about offer?

[Nancy Nelson]

So let's say your realtor  makes a 90k cash only offer for you on a foreclosed townhouse , submits it to the listing agent and three days later has to call listing agent to ask outcome. She is told that another offer came in higher, we didn't get it. Couple of weeks later the Mel's shows that the property closed and was sold for 88k? My realtor says that is common practice with listing agents... is that true? Anyone else experience this?

[Aaron Lovett]

Lots of stuff happens behind the scenes in negotiations (including between the seller and his agent and the seller and other buyers) that you and your Realtor won't know.  None of it has to be corruption.  For example:

Suppose your offer was tied with another offer - literally exactly equal offers in every respect.  They flipped a coin and chose the other. Then, something came up that resulted in them having to negotiate on price (inspection, appraisal, whatever).  They have the option of walking away and taking their chances with you or another buyer, or they could see the deal through for 88k instead of 90k.  The seller thinks a sure 88k is better than starting all over again, so they sell for 88k.  What would you do in their shoes?