[5-DayForum] Vancouver, WA - Day 5
Bill Effros
bill at effros.com
Mon Nov 5 16:07:15 EST 2007
Jim,
I posted the "Magic Numbers and Magic Endings" stock answer.
There is no way anyone can honestly say what would have happened had you
started at a different number. You got plenty of responses.
Still, I think you now think $380,000 might be more than anyone can get
for this property at this time. If real buyers looked at your numbers
and understood the 5-Day Formula, they might have thought the same
thing, and decided not to attend. They might have correctly believed
that your seller was not prepared to take the current market value of
the property, and would not offer the home to the high bidder Sunday night.
This is the strength of actually offering it, allowing the deal to fall
through, and then offering it again at a substantially lower magic
number. Everyone is going to believe the high bid the second time
around: you, the seller, the bank, the real buyers, every broker in town
-- everyone will know the best number you can come up with is the best
number anyone can come up with at this time -- if that were not true,
Danielle, or some local broker or investor would simply snap up the
property at a "give-away" price.
Properly run 5-Day Sales are amazing in their ability to elicit the
highest possible price on a given day for any property. People who see
this week after week, year after year, always offer the house to the
high bidder. Sometimes there is some additional footwork involved, but
both parties should know they are very close to a fair deal at the end
of the Round Robin.
$1 won't work for 5-Day Sales. It doesn't provide enough information to
potential buyers. The Magic Numbers convey a range without a fixed
price. That's the whole idea, and it seems to work.
Bill Effros
James Fleming wrote:
>
> 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.howtosellyourhomein5days.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.howtosellyourhomein5days.com>
> [mailto:5-dayforum-bounces+jamesfleming=cbseal.com at mailman.howtosellyourhomein5days.com]
> *On Behalf Of *Frederika Valle
> *Sent:* Sunday, November 04, 2007 10:38 PM
> *To:* 5-dayforum at mailman.howtosellyourhomein5days.com
> <mailto: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
>
>
> ------------------------------------------------------------------------
>
>
>
>
> _______________________________________________
> 5-DayForum mailing list
> 5-DayForum at mailman.howtosellyourhomein5days.com <mailto:5-DayForum at mailman.howtosellyourhomein5days.com>
> http://mailman.howtosellyourhomein5days.com/mailman/listinfo.cgi/5-dayforum
>
> ------------------------------------------------------------------------
>
> _______________________________________________
> 5-DayForum mailing list
> 5-DayForum at mailman.howtosellyourhomein5days.com
> http://mailman.howtosellyourhomein5days.com/mailman/listinfo.cgi/5-dayforum
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.howtosellyourhomein5days.com/pipermail/5-dayforum/attachments/20071105/deea6097/attachment.html
More information about the 5-DayForum
mailing list