[5-DayForum] Vancouver, WA - Day 5

Mon Nov 5 14:15:33 EST 2007

Bill,

I thought I did start with a magic number.  $379,900 ÷ 2 = $189,950.  I
reduced it to what I thought was a magic number as described in your last
paragraph on page 139 of the third edition.  I started with $189,500, a
number that people read correctly and that forced them to contact me to find
out what was going on.  It worked like a charm.  I am not clear on why
$174,500 would have been my magic number.  

I must say that I am curious about your suggestion that I would have done
better if I had started at $149,500 instead.  There probably would have been
more traffic, but do you think that it would have changed the outcome?
Online auctions at sites like eBay.com and PropertyRoom.com seem to do very
well when beginning bids are set at just $1.  Do you think that 5-Day
sellers would have better results using the same tactic? 

We are huddling later today to make our decision about the high bidder, the
bank, and the various possibilities.  Thanks for your pointers.  And, per
your suggestion, if a deal is not struck, we will offer the home again on a
5-Day at $149,500 exactly as you have outlined.

I’ll keep the Forum posted.

Jim F.

  _____  

From:
5-dayforum-bounces+jamesfleming=cbseal.com at mailman.howtosellyourhomein5days.
com
[mailto:5-dayforum-bounces+jamesfleming=cbseal.com at mailman.howtosellyourhome
in5days.com] On Behalf Of Bill Effros
Sent: Monday, November 05, 2007 6:35 AM
To: How To Sell Your Home in 5-Days
Subject: Re: [5-DayForum] Vancouver, WA - Day 5

Jim,

Thanks for this report.  Please let us know how it all shakes out, and how
you get from where you are to where you wind up.

I wonder why you didn't start with a magic number.

$174,500 would have been your magic number, although I think you would have
done better at $149,500.

If you told the bank you had a buyer at $420,000, do you think the appraisal
would still come in at $420,000?  If you told the bank you had a buyer at
$330,000, what do you think the appraisal would be?

If I were in the shoes of the seller I would try to sell the home to high
bidder as promised.  This would involve huge concessions on the part of the
bank, which they probably won't make.  The buyer could either find a deal,
or not.  The seller remains only the referee.

Assuming a deal is not struck, I would offer the home again, using the 5-Day
Method, spending another $762 at $149,500.  You will get many more calls
than you got the first time.  People who already inspected your home, and
left a bid, don't have to inspect it again.  People will ask what happened
the first time around, and you explain exactly what happened, and what deal
the bank finally rejected.

Involve the bank.  Let them provide any buyers, on any basis, who they think
will pay more in the current market for your home.  They can bid themselves
if they want to--because they're going to wind up with the property if it
isn't sold to someone else.

You clearly understand the 5-Day process.  As soon as the bank understands
it, and when they understand the current market value of the property, your
seller will be able to get rid of this property.  No miracle is going to
happen in the short term to bail out the seller.  The seller is going to
take a bath, and there is no help for it.

But your seller probably understands this by now, and is only trying to
figure out how to make this happen as quickly as possible.  With this 5-Day
Sale under your belt you have markedly improved your seller's bargaining
position.  Use that knowledge.

Bill Effros

James Fleming wrote: 
Vancouver, WA – Traffic today picked up.  By 5:00 PM there were 22 total
bidders for the two days who had left their names, phone numbers, and entry
bids.  The house comps out at $417,500, has a 4-month-old appraisal of
$420,000, is realistically (I thought) listed at $379,900 and the 5-Day
minimum bid was set at $189,500.

Bidding started at 7:00 PM.  3 people did not answer their phones.  6 people
dropped out in the first round. 5 people dropped out in the second round.
Nobody dropped in the third round.  1 dropped in the fourth round. 5 dropped
in the fifth round.  Two people battled back and forth for seven more
rounds.  The high bidder’s bid was $261,500, about $70,000 lower than
minimum target, 62% of the appraisal, and 69% of the listed price.  The
round-robin took 4 hours.  Advertising budget was $762.

Tomorrow the seller and I will go over the scenario and decide on our plan
of action from here.  First on the agenda is to decide whether to attempt to
negotiate with the high bidder a compromise somewhere between the high bid
and the seller’s re-considered lowest acceptable price.  Failing this, we
will make a call to the lender, offer in hand, to explore the possibility of
a short sale.  Although I have a great deal of experience with short sales,
I’ve not proposed one under these circumstances before.  It doesn’t quite
fit the usual parameters.

More tomorrow.  I need to give this all more thought.  As for the 5-Day
method itself, in my opinion it worked perfectly.  The final high bid was a
disappointment, but it had nothing to do with the 5-Day method.  The market
is the market.

Jim F.

  _____  

From:
5-dayforum-bounces+jamesfleming=cbseal.com at mailman.howtosellyourhomein5days.
com
[mailto:5-dayforum-bounces+jamesfleming=cbseal.com at mailman.howtosellyourhome
in5days.com] On Behalf Of Frederika Valle
Sent: Sunday, November 04, 2007 10:38 PM
To: 5-dayforum at mailman.howtosellyourhomein5days.com
Subject: [5-DayForum] The results are in....

A couple of weeks ago I found out about Bill's book and I offered my
services to a person who called me because they were interested in selling
their property. Well, I've been reading the posts and studying the book,
taking into account all information and here's how the auction went....

I started advertising a week in advance instead of the Wednesday before. We
staged the house (we got a lot of complements on the staging). I got all of
my calls including more on Saturday and Sunday. I put ads in the Pennysaver,
Los Angeles Times, Daily News, La Opinion (spanish Newspaper), some online
websites, flyered some parking lots, and on  Saturday and Sunday we had 5
people standing on various street corners holding huge signs that said
"House Auction Today". I spent at least $500 in advertising; more than
likely more than that.

Judging from the number of bidding rules handouts I had left over, on
Saturday I had about 38 people visit (not including the family members that
they came with) and on Sunday I had about 40. Sunday at 5pm I had 21 bidders
on the bid sheets. Come Round- Robin time, 8 of those people were
unreachable including two people who wrote down fax #'s even though I told
them that I needed a number that would be good for 8pm (why write down your
name if you really don't want to bid?). After the first 2 rounds about 5
people dropped out. Then it eventually came down to two main bidders. 

The home was an older home built in 1950, so it has smaller rooms and
closets; however, it was recently upgraded and it has a large patio with a
swimming pool and a finished garage. It is also located in a prime
residential area. The way that the book tells you to price the home is 50% -
$500 from what you actually would like as your minimum. I saw forum postings
saying that most people got 20-30% less than their desired . I took this
into account and added another $50k to the starting bid. Unfortunately the
bidders were still $100k less than the reserve that the owner wanted.
Because of this, the owner wasn't able to accept the highest bid.
Realistically the owner was still a little high, but the bidders were also
very low. People know that the market is not so great  and are really trying
to get as much as possible for as little as possible.

Reflecting on all of this---- With the market the way it is, this is not the
way to go right now. It's a great method and might still work in emerging
markets where things are starting to go up, but where things are leveling
off or going down, it's not the time. Now, if you have equity in your home
that will allow flexibility with numbers, this still could work for you as
well. But for those who MUST SELL NOW and need a price that's close to
market, save yourself the advertising costs! Try to lease option or hold on
to the property if at all possible. Some good things did come out of the
process: I got the experience; I handed out a few business cards for
investing; I got some new names for my buyer's list; and I even got a few
offers from people to stage their property for them!

Now I must bid adieu, because I haven't slept much in the last 4 days due to
the auction preparation!

-Rikki

  _____  

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