Page 120 - Selling secrets 5 18 2023

BANK ERROR

Banks know that if a buyer makes an unsolicited offer, 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
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 them would 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 due to an
oversight, they put the property on the market for $67,000.
First, the bank under-priced the property by $33,000.
Second, the hired agent didn’t market it properly. Errors
were made in the MLS listing. As a result, it did not 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, the agent 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 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.

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