asking price, and the bank accepted it. He saved $33,000 because the bank’s agent didn’t perform well and substantially underpriced the property. The bank suffered a significant loss.
ERRORS IN PRICE ADJUSTMENT ARE COSTLY
There are times when pricing adjustments may need to be considered. For instance, let’s look at Tim and Sue’s situation. Comparable Home A: $368,000. Comparable Home B: $349,000. Tim and Sue’s Home: $345,000. Comparable Home C: $345,000. Comparable Home D: $333,000. Comparable Home E: $329,000. Tim and Sue appear to have priced their home competitively for the market. Over the next month, the market changes. Comparable Home A: Expired. Tim and Sue’s Home: $345,000. Comparable Home B: $339,000 (Reduced Price). Comparable Home C: $335,000 (Reduced Price). Comparable Home D: Sold. Comparable Home E: Pending. Comparable Home F: $326,000 (New Listing). Comparable Home G: $325,000 (New Listing). Comparable Home H: $319,000 (New Listing). Tim and Sue now have the highest priced home in the area in their price range. When a buyer looks at the comparable home prices, it is now the worst value proposition in the marketplace. Most sellers, like Tim and Sue, do not realize the market can shift so far so quickly. It cannot be stressed enough how important it is for you to price your home right the first time. House D sold,
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