Joe-- the fact that the realtor represented the seller just galvanizes my points. Why would a seller hire a realtor then not expect them to get the best price for their property? Real estate agents are advocates for their client, just like many other professions. Just because you have a problem with that advocacy postition doesn't mean it's unethical.
If you were to sell your own house FSBO, wouldn't you want to get the highest price? Using your reasoning you would lower the price so that the buyer got a good deal.
Buyers are free to hire their own agent and have their own best interests represented. In most areas of the country, the buyer's agent is compensated by the seller's agent- so a buyer can typically have their own representation without actually having to come up with their own money. You call that greed? I call that a great deal that is available to a buyer because of the existence of realtor's MLS system. The realtors code of ethics also advocates that all parties to a transaction have their own representation. And most state licensing laws are drafted with significant assistance by the state realtor association with an emphasis on a balance between the buyer and seller's interest. Nothing you told me about that buyer's situation showed that she was taken advantage of because of a situation that a realtor set up, but rather, because she decided to make her own decisions.
The majority of real estate transactions in most urban areas are comprised of buyers and sellers who each have their own representation anyway. In my state, there are all sort of disclosures that have to be made to a buyer who is receiving services from an agent who will be respresenting the seller, and not the buyer. A buyer basically isn't too wise if they decline the services of their own agent. And they certainly will be aware of their lack of representation by the time they decide to buy a house. Our state realtor association actually pushed quite hard to get those disclosure laws passed the last time that our license law was revised. In fact, that required disclosure form actually provides a checklist of things that an agent can, and cannot do, when helping a buyer in a ministerial (non agency) capacity. Most buyers would choose to be represented by someone (even their attorney) after reading that form.
There are also sellers in desparate situations who a very happy when their realtor is able to get the highest price for their client. So unless you know the seller's situation, it's really tough to say that the realtor was trying to rip off the buyer. Perhaps the seller is grateful that they've been assisted so well by their agent and they now have money to pay off their medical bills, get surgery, etc.
You've basically portrayed a situation whereby a cash buyer decides to buy a house without being represented by anyone. She decided to not even go through with ordering an appraisal or be influenced by a family member. She has the money, and has found a house that suits her need. This is a great country that allows for people to make their own decisions- good or bad. What's wrong with that?
Most appraisers have very little first-hand experience with representing buyers and sellers in a real estate transaction. There's so much more to a successful transaction than just the price that was paid. Unless you are in the middle of a transaction, it's nearly impossible to determine whether a real estate agent did a good, or bad, job based solely upon the price that their seller received, or buyer paid. Ultimately, buyers and sellers make their own decisions and the transaction, at face value, usually doesn't provide enough information to be indicative of the agent's influence and ability.
With respect to the USPAP situation, read the Management section. By telling the buyer, in advance, that the house would not exceed a certain value violates the part about performing an assignment with a predetermined result. You could accept that assignment then find out that the interior of the house in unlike what you thought. You'd be in the middle of a situation whereby you've promised the value wasn't above a certain amount, yet it could be.