foreclosure and searched online until he found the listing. Realizing it was drastically underpriced, he immediately submitted an offer at the asking price of $67,000, which the bank accepted. This series of mistakes cost the bank dearly. Had the property been priced accurately and marketed effectively, the two original buyers would likely have sparked a bidding war, driving the price up to its fair market value. Instead, the bank lost $33,000, and the buyer gained a tremendous deal—all because of underpricing and poor execution by the agent.
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.
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)
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