gave up. Ultimately, both buyers moved on to find other parcels of land. Meanwhile, the property sat on the market, unnoticed. Due to the agent’s mistakes, no interest was generated, and the property went into foreclosure. The man who lived nearby knew that the bank had been trying to foreclose on the property. He conducted some research on the foreclosure at the courthouse and discovered that the bank had successfully foreclosed on it. Realizing it needed to be listed somewhere, he went online and searched through all the properties for sale until he found the listing. To his surprise, it was priced well below market value. 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 consisted of acres of raw pasture with no issues. The buyer had lived nearby for years and was very familiar with it. He submitted the asking price, and the bank accepted. He saved $33,000 because the bank’s agent performed poorly and significantly underpriced the property. Consequently, the bank experienced a substantial loss.
ERRORS IN PRICE ADJUSTMENTS ARE COSTLY
There are times when pricing adjustments may need to be considered. For instance, let’s look at Tim and Sue’s situation.
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