[5-DayForum] harsh reality - Position Clarification

Sat Sep 1 12:31:38 EDT 2007

PS -- What are you capn of?

Bill Effros

capndave2k at netscape.net wrote:
> Since I originally posed this question, I've been reading more of what 
> Bill says. 
>
> I should clarify that I personally have no undisclosed reserve.  There 
> are factors that are out of my control (The mortgage and 2nd).  I'm 
> committed to selling on that weekend even though I could potentially 
> loose all of my initial investment.  My view is that the loss will be 
> made up within 18 months by the cash I will keep in my pocket every 
> month. 
>
> So the question is, do I answer the question as I've suggested below?  
> I think I'm being truthful and I'm not holding anything back but I 
> don't want to limit the potential buyer pool by poisioning the bidder 
> pool into thinking that I won't sell the place.  I will! 
>
> David Cron
>
>
>
> -----Original Message-----
> From: capndave2k at netscape.net
> To: 5-dayforum at mailman.howtosellyourhomein5days.com
> Sent: Fri, 31 Aug 2007 12:56 pm
> Subject: Re: [5-DayForum] harsh reality
>
>
> Mark,
>
> I've looked at most of these posts too.  Here's what I plan to do with 
> my sale in Arizona next weekend (9/8-9).  I will advertize exactly as 
> Bill describes in the book because I believe him when he says that 
> modifying the format of the advertising will reduce the price as well 
> as having an "undisclosed reserve" that you tell buyers about. 
>
> Now, that having been said, When I'm asked the question about what is 
> the minimum I will take, my response will be something like the following:
>
> "As long as the high bid will satisy the leinholders and transfer 
> costs, we will sell the property.  I am not in control of the third 
> parties.  That having been said, we put a substantial down payment on 
> this property when it was purchased so there shouldn't be any problem 
> with the high bidder satisfying that requirement.  In the unlikely 
> event that the high bid doesn't satisfy that requirement. I will 
> provide documentation ot the high bidder of the amounts owed and work 
> with them at their option to complete the sale." 
>
> Everything in the foregoing is true.  The house was not purchased on a 
> 100% or even a 90%LTV and I will accept any offer that covers the 
> loans and closing costs.  If the high bid is below the amount owed I 
> have no problem at that time disclosing the amounts (I can document 
> from the statements from the mortgage holders).  This home was 
> purchased in 2006 and I'm expecting to take a capital loss on it,  
> (although I'll be thrilled if that doesn't happen).  I'm not in 
> distress here and the loans are current so I don't expect the mortgage 
> holders to accept a short sale.
>
> Does that work for you ethically?  Bill, what do you think?  Comments 
> anyone?
>
> Thanks in advance for your responses.
>
> David Cron
>
> -----Original Message-----
> From: Mark Conway <sanford5daysale at yahoo.com 
> <mailto:sanford5daysale at yahoo.com>>
> To: 5-Day Forum <5-dayforum at mailman.howtosellyourhomein5days.com 
> <mailto:5-dayforum at mailman.howtosellyourhomein5days.com>>
> Sent: Fri, 31 Aug 2007 6:20 am
> Subject: [5-DayForum] harsh reality
>
> Folks, I'm going to stir the pot a bit with this note. You've been warned.
>  
> The forum has become pretty discouraging reading for me. It seems 
> common for people to run 5-Day Sales with an undisclosed reserve, 
> a bidding threshold below which they will not sell their home. In and 
> of itself, I don't see this as a problem. It's the real world. 
> Homeowners have mortgages for which the banks hold them financially 
> responsible. What I find disturbing is when I see a 5-Day Seller 
> making a conscious decision not to inform prospective buyers of the 
> existence of the undisclosed reserve at the outset. It's a deceptive 
> practice. It's misleading to bidders who believe their bids are taken 
> seriously, not conditionally, by the seller.
>  
> Sure, many 5-Day Sellers list a rule that says that bids aren't 
> binding on the buyer or seller until a contract is signed. It's a 
> comfortable escape clause that, as much as anything, can be a platform 
> for negotiation. As much discussion as there is about this issue, 
> however, that rule ought to be in over-sized type, bold, underlined 
> and listed as the very first rule on the Bidding Rules document so 
> bidders fully understand how seriously the seller takes this 
> provision. List the rule that way and see what kind of questions it 
> prompts from potential bidders. It's better that discussion happens 
> before and not after bidding.
>  
> Clearly stating the minimum bid that will be accepted is one approach 
> that has been mentioned in the Forum. That seems straightforwardly 
> honest to me. Phrases like "Highest/Best Bidder" and "Best Reasonable 
> Offer" are just seller's weasel words used to ease the seller's 
> conscience and reduce his or her anxiety while still concealing the 
> complete truth from prospective buyers.
>  
> When a seller has a "hidden" undisclosed reserve and a prospective 
> buyer comes to inspect a 5-Day Seller's home and asks the seller, 
> "What's the minimum amount you'll take for your home?", the seller's 
> answer will be indicative of his or her character. One answer could 
> be, "I can't tell you what the reserve is." That's evasive but 
> truthful. Denying the existence of the undisclosed reserve at that 
> point would be lying. Period. Rationalization doesn't change that.
>  
> There's a fair amount of talk on the Forum about having to make that 
> difficult phone call after the round-robin bidding is over to tell the 
> highest bidder that the seller is reneging on the commitment to sell 
> the home to the highest bidder. That phone call is difficult because 
> the seller has been disingenuous with the bidders. That's a seller's 
> conscience kicking in, albeit too late.
>  
> 5-Day Sellers who want their bidders and prospective buyers to treat 
> them with integrity should be modeling that behavior themselves. What 
> goes around, comes around. If a 5-Day Seller is not truly prepared to 
> take the highest bid, then they should NEVER make that claim.
>  
> Here's to 5-Day Sales run in a manner that respects the integrity 
> of buyers and sellers.
>  
> Mark Conway
>  
>  
>
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