[5-DayForum] Start Round Robin With High Bidder

[Sandra Diggs]

Thank you Bill.  This makes perfect sense, and I appreciate the time you took to reply thoroughly.---Sandra

Bill Effros <bill at effros.com> wrote:  Sandra,

If you think of a typical outcry auction, the auctioneer never says "what's the least anyone will give me?"

The auctioneer always says "the high bid is $$$, will anyone give me more?"

When you conduct a round-robin you move from an open bidding sheet to a round-robin bidding system.  The first thing you must do is determine what is your high bid.

You don't know the high bidders.  You don't know if the high bidders bought another home over the weekend.  You don't know if the high bidders' telephone number works.  You don't know if the high bidders are going to be there.

The first thing you do is call the high bidders to find out if they are still prepared to honor the high bid.  Then you completely explain how the round-robin will work, how many other people are in the running, and how long you think it will be before you call the high bidders a second time.  (Figure 5 minutes per bidder.)

Then you explain to the high bidders that they can top their own high bid at this point, or they can wait until everyone else has bid before they decide what they want to do.  This is an enormous advantage, because the high bidder is both the first and the last bidder in the first round of the round robin.  No one else gets two shots at the apple without topping the high bid.

Sometimes, after listening to the entire situation, the high bidder decides to raise the initial bid immediately.

Let's say the high bidder is prepared to pay a maximum of $99,500, and the high bid on the initial bidding sheet is $98,000.  The next bit is 97,500 -- and there are four people at that level.  The next bid is $97,000, and there are three people at that level.

Everyone understands the home is worth somewhere around $100,000.  Everyone understands someone is going to top the $98,000 bid.  Somebody is going to bid $98,500.  And somebody else is going to bid $99,000.  And somebody else is going to bid $99,500.  So the high bidder would not get the home, because by the time the round-robin gets back to the high bidder the bid will be above where the high bidders prepared to go.

The smart bid for the high bidder is $99,500.  That is the most they are prepared to pay, and, if they don't raise to that level initially, they won't get another chance until after someone else has already bid that amount.

Some high bidders increase their bid initially.  Others don't.  You're just the referee.  You discuss the bid with the high bidder, and allow them to make their decision.  No matter what they decide, you call the second high bidder next, and go through the same explanations all over again.  Is the phone number good?  Are they there?  Are they still interested in your home?  Are they prepared to honor their bid? Do they understand how the round-robin works?

You then go all the way down the list from the top to the bottom eliminating those who won't top the high bid until you have just a single high bidder, with no one willing to top the high bid.  You explain to the top three where they are, and get all the information from the top one so you can get your settlement moving first thing Monday morning.

I've had a lot of trouble explaining this.  Does this make any sense to you?

Bill Effros





Sandra Diggs wrote:     Hello All:
   
  I never understood why you start the round robin with the high bidder.  What do you say to the high bidder?
   
  If figure if you started with the low bidder, you'd inform them of the highest bid and ask if they wanted to proceed any further.  Please explain.  Thanks and
   
  Regards,
  Sandra

Bill Effros <bill at effros.com> wrote:
   Start with the high bid.  Then go to the next high, and the next.  Keep the bidders in the same order, removing those who don't top the high bid.

Bill Effros

Scott Ames wrote:   The version of the book I have never says which to start with, it just says call all the bidders, explain the terms, and get their bid or let them drop out. 

Saltonfishing at aol.com wrote:       Help,
  a little unclear how to proceed on the second round. do we start with the high bidder or start with the low bidder and ask them to top the high bid?
  jim



    
---------------------------------
  Get a sneak peek of the all-new AOL.com.
_______________________________________________
5-DayForum mailing list
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      
_______________________________________________
5-DayForum mailing list
5-DayForum at mailman.howtosellyourhomein5days.com
http://mailman.howtosellyourhomein5days.com/mailman/listinfo.cgi/5-dayforum

  
  
---------------------------------
  Be a better Heartthrob. Get better relationship answers from someone who knows.
Yahoo! Answers - Check it out. 

---------------------------------
  _______________________________________________  5-DayForum mailing list  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


       
---------------------------------
Be a better Heartthrob. Get better relationship answers from someone who knows.
Yahoo! Answers - Check it out. 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.howtosellyourhomein5days.com/pipermail/5-dayforum/attachments/20070902/4b0c35a4/attachment.html