I know that for residential that basically means abiding by their code of ethics.

There's also an ethics issue here.You also need to consider the fact that 99% of wholesale offers on short sales will not be accepted b/c the offer is too low.

There are always people around, including certain Licenced Realtors, who because they can sniff a profit, will find loopholes in the Banks intention to find the Buyer who ACTUALLY wants the property, but that sort of double-closing REO activity should not be attempted by the uninitiated, or by those who subscribe to what has been called "Kumbaya ethics" ie. those who want to honour the Banks intention!  

I am not sure about the ethics behind this.How did you go about it when you started?

I've been wholesaling for over 10 years and it's a good place to be in if you are willing to 1) do the work needed to provide value to all parties (sellers and buyers) and 2) keep transactions ethical as you look to build a reputable business more than make a few extra bucks off of a deal.

I am active in local groups and enjoy speaking publicly about the importance of ethical negotiation.I am a real estate investor in Charleston, SC since 2010; leaving the “rat race” in 2013.

Just out of curiosity, is there any moral or ethical shame in buying foreclosures, i.e., are you taking advantage of someone else's misfortune by doing this?

That means that he is required by ethics and by law to represent the seller's best interest - not yours. 

Awesome to hear there is ethics involved to the fair market offer.

I know myself well and hold my work ethic to a high esteem.