Had the bank and agent not made these mistakes, the two initially 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 or beyond. Most bank-owned properties are priced belowmarket 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. In this case, though, the bank missed a full-price sale and lost at least $33,000! The property was acres of raw pasture. There were no unseen problems with it. The eventual 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, and the buyer got a steal. 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
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