After the bank refused to work with the buyers, each waited for the listing to appear. When it didn’t show up in searches, they gave up. Ultimately, both buyers moved on to find other pieces of land. Meanwhile, the property sat on the market, unnoticed. Because of the agent’s errors, no interest was generated, and the property went into foreclosure. The man who lived nearby knew the bank had been trying to foreclose on the property. He did some research on the foreclosure at the courthouse. He found out the bank had successfully foreclosed on it. Knowing it had to be listed somewhere, he went online and searched through all of the properties for sale until he found the listing. To his surprise, it was priced well below the market. Had the bank and agent not made mistakes, the two originally interested buyers would have made offers and likely started a bidding war. There is a good chance the two buyers would have driven the price up to the fair market value. Most bank-owned properties are priced below market for a reason. Banks will discount homes they sell because they sit empty for months, and the banks typically have no knowledge of their condition. The bank missed a full-price sale and lost $33,000. The property was acres of raw pasture. There were no problems with it. The buyer had lived down the road from it for years and was very familiar with it. He submitted their 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 ADJUSTMENTS ARE COSTLY
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