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Sell Your House in Five Days?
By JLP | March 1, 2006
Auctions work for books, old movies, clothes, and cars but will it work for selling a house? According to this CNN/Money article titled A 5-Day Plan to Sell Your House, auctions are gaining in popularity among home sellers. The process works like this:
1. Wednesday start advertising in newspapers, signs, and media. State that the home will be awarded to the highest bidder after a two day open house.
2. Sellers set startling low selling prices. Kinda reminds me of eBay.
3. At the open house, all attendees are told to sign-in and place a written bid on the sign-in sheet.
4. After the open house has closed on day 2, the sellers conduct bidding over the phone by calling each bidder and asking them if they would like to raise their bid.
5. Repeat step four until there is one bidder left.
So, what’s the risk? I suppose there is the potential of selling your house for a much lower price than you wanted. However, I would think this would only be a problem in smaller towns. I don’t think it would be a problem in a large city.
It’s an interesting idea. One that I’m sure will make real estate agents cringe.
Topics: Housing Market |
March 1st, 2006 at 12:50 pm
This is assuming they have already gone through a credit check, or preauthorization??
March 1st, 2006 at 1:03 pm
Yes - not to be pedantic (although pedantry’s my middle name) this would be more precisely titled “how to find a buyer in five days”. All the inspections, searches, loan qualifying, and such could still take weeks or months and may still involve an agent of some kind who knows what they’re doing. You may still save money since most agents will handle this sort of transaction for a flat fee, but most of the trickier bits of real estate transactions are done _after_ finding a buyer.
March 1st, 2006 at 2:18 pm
We tried this approach in Indianapolis last spring. Some friends of ours said that their father had done this a few years ago and had success. They lent us the book which we read, understood, and said, “why not…lets give a try.” The book goes through step-by-step the process, the “what-ifs” (like, what if only one person bids); they even tell you EXACTLY how to write your ad. We saw very low risk involved, since you do most of the work up-front (inspections, fix-ups, painting, advertising, etc), most of that would have to be done anyway (but usually after the signed purchase agreement); basically, the seller just moves their costs to before-the-sale in lieu of after.
All that to say…we did not sell our home (by that method, anyway). The week of, we only received 5-6 calls (not the 20 minimum required to keep the sale on). We went ahead and had the “open house” that weekend and 3-4 people came by. We were wanting $115K, but the bidding started at $74,900. We got calls, drive-bys from investors, seeing the $74,900 price tag for our home; we got comments like, “this home, in this area of town, for $75K?…whats the catch?” One guy said that he would pay $105K in cash ($30K down/monthly payments for 12 months)…would we accept that? We politely said, “No.”
After that weekend, we went the traditional FSBO for 3 months, then listed with a relator for 5 months before we actually sold…final price: $109,500 FHA.
Oh, well. Now we are in our new home (now 4 weeks) and love it.
March 1st, 2006 at 11:47 pm
It took you 8 months to get an extra $4500. In retrospect, you should have taken the cash offer (assuming it was legit).
March 2nd, 2006 at 12:23 pm
…It took you 8 months to get an extra $4500…
Especially when you factor in the relator’s commissions, etc. We actually walked away with less than the cash offer.
…but I don’t think it was legit.
March 3rd, 2006 at 1:26 pm
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July 15th, 2007 at 9:17 am
Spoke with a number of people who have tried this method (not many have found success). I have tried it this week. No luck, very few responses, no people to inspect the property, followed the book details as required. Maybe hot neighborhoods will drive the auction better. Kind of a waste of time particularly when the objective is to sell to the highest bidder when the high bidder of the day may be a very low bidder.
July 15th, 2007 at 9:24 am
Spoke with a lot of people this week who have tried this method in the past few months - none that I talked to had found success with it. Two auctions this weekend based on this were canceled due to lack of response. To say it should work every time is therefore invalid. I have tried it this week. No luck, very few responses, no people to inspect the property, followed the book details as required. Maybe hot neighborhoods will drive the auction better. Was a waste of time for me - halved the value of the property and then the people who called were only interested in the value I had listed as opposed to wanting to bid it up. Something wrong here.
August 1st, 2007 at 6:04 pm
I read this book in 2003, and called a Real Estate Attorney to handle the sale. He’d never heard of this idea, but said, the basic principle should work. He suggested listing it in the paper first at full price to see what happened (as the market was good). Three people called to see it the morning it listed; I scheduled them to come within 5 minutes of each other, so they’d each know there was “competition”. It worked–one guy called from out front to make an offer, and another man still viewing it made an offer, so..bidding war. That market was much better, in Baltimore at the time; now I’m wondering if I’ll be able to sell this house in No. Virginia, the same way. It seems like this method would only work in certain markets; perhaps Florida, Arizona and California are over-saturated with inventory (homes) due to the housing crises, there? I’m trying to move to Florida and IF I can sell this house, I’ll rent for a while; we got stuck at the top of the bubble in this house.
September 20th, 2008 at 11:33 am
Wow! How disappointing all the comments are! My husband and I are in the process of doing this. It came highly recommended by a friend who did it and sold his house! My main concern at this point is should we or should we not put the address in the ads? Does this affect the sale one way or the other? Our open house is next week and I would like to know before the ads go out. This has been one of the most tiring things I have ever done. We feel like we just can’t do enough to get the house ready. Already had it inspected and appraised. Should we put the appraisal out for people to see? (Providing anyone shows up)
October 2nd, 2008 at 8:30 pm
I too wanted to give the 5 day method a try in NJ.
Did it work for anyone recently? Please let me know. Thank you!
October 7th, 2008 at 11:40 am
My husband and I bought this book in 1997. Used this method and had success in Indianapolis.
I am nervous with the market in it’s current state, but will be trying this method once again…this weekend in Bloomington, IN.