If the listing agent says another offer is coming in and would you're buyers like to increase the price: Be like water. "If you are confident you have another offer coming in, then I would be happy to pass on your counter-offer to my clients. When can I expect your counter-offer in writing?" If the listing agent insists on you voicing the counter, insist that he be part of the conversation. Let the conversation flow right through you. This covers you in the event the owner/broker tries to seperate you from your client and save/earn a commission. I'm sure that happens much less in residential but I got stung once in a commercial deal so I know it happens. This also protects your client relationship because it makes it clear who the bad guy is: not you. And if/when the owner screws this deal up, you and your clients are already offering on a different house. That said, get em out looking now and let the owner know it!
Eric Robbins, MIMiC