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I thought that anyone could walk away from the transaction at any time before the contract was signed? So if he is still their agent wouldn't he still have a responsibility to tell the client of any larger offer?

Except assuming those numbers and what the buyer in that story said was fact then it seems to me a pretty clear case of malpractice? The buyer offered $280k originally and had obviously been in negotiations with the REA before the contract had been signed, so the eventual buyers offers were...