We are a third party negotiator and just had the following scenario:

Buyer offers $270K for a property so we put the offer in. We are informed that an appraisal is being ordered by the servicer. About a week or two later, the listing agent calls us; 

"Buyer wants to lower their offer to $230".  Huh? Why?  "They just had an appraisal done and it came out at $235,000."

"Great" I say, "just send me a copy of the appraisal and we will forward it to the servicer to justify them lowering the price."  We notify the servicer that the offer will be lowered and why. Negotiator says fine - give me a copy of the appraisal. (In hindsight I will ask to see the appraisal FIRST before doing anything further!)

Buyer agent creates an addendum lowering the price, all parties sign it. We wait ... no appraisal.  Negotiator for the servicer keeps calling -- "OK - where is this appraisal?"

We keep pressing the listing agent and are then told that the buyer agent admitted they didn't have one done, they "just used the one that was done for the BPO." So now I'm thinking they used information they never should have had to change their offer and are concerned about how this is going to play out.

We call the appraiser for the servicer and ask him if he shared his appraisal with anyone on the buy side and he flatly denies doing so. We are stymied as to how the buy side knew what the appraisal came in at unless he shared that information with them.

A week later we get a copy of an appraisal done for the buyer, and discover that it was done by the exact same company AND PERSON who did the appraisal for the servicer.

We discover further that the selling agent, when asked, had disclosed the name and phone number of the person who did the servicer's appraisal to the buyer agent.

The buyer used the same appraiser and had him do their appraisal. There is no disputing this - we have documentation that proves it. It is the exact same appraiser and exact same result (and not a very good appraisal at that.)

We say "conflict of interest" and feel an obligation to disclose to the servicer what has transpired.  We do so, in writing. Negotiator tells her manager and they don't see any big deal because "the investor will make the decision as to what the value is" AND tells us that "this is the only company in the area to do appraisals anyway."

We still see this as a problem. Do you agree or am I missing something here?