BANK MISTAKE
Banks know when a buyer makes an unsolicited offer, and most of the time the offer is below fair market value. In one case, a bank lost more than $30,000 on a mistake based on that assumption. Two people were interested in buying a particular piece of property. It was in an excellent location and unique among properties available in the area. Both buyers were anxious to make an offer before someone else could offer more. Either one of themwould have been willing to pay the fair market value of $100,000 for the property. Money was no problem; both buyers had the ability to pay in cash. Unfortunately, the bank refused to take any offers on the property. They would not budge until it was listed on the open market. For some reason, possibly an oversight, they put the property on the market for only $67,000. First, the bank underpriced the property by $33,000. Second, the bank’s agent did not market it properly. Errors were made in the MLS listing. As a result, it didn’t show up in search results for other agents who had buyers looking for that type of property. The address was incorrect. As a result, the listing did not show up on any of the real estate websites that use a map display. Finally, he neglected to put a sign on the property. (The person who eventually bought it lived down the road and drove past the property every day.) After the bank refused to work with the buyers, each waited for the listing to appear. When it did not 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, the property didn’t generate any interest and it 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 and discovered that the bank had successfully foreclosed on the land. 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 its market value.
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