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Updated about 14 years ago on . Most recent reply
Has anyone tried the "public bid sale," aka "round robin auction" or 5-day sale method?
Many real estate courses talk about this in some iteration or other. a realtor Calvin Curry is promoting his "sold-in-a-week" method based on the same concept. I got books by Bill Effros and William Bronchick that outline this method. I just tried it this weekend for a wholesale deal I locked up but the result was a bit underwhelming: 3 families showed up Saturday and one of them put in a bid that was lower than my contract price with the seller. I'm kind of wondering what to do next. I am looking to close quickly but I can't sell at a loss. :) Has any one tried it and did you have success with this method?
Most Popular Reply

- Lender
- The Woodlands, TX
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This method was originated by investment banks as a way to get the highest price for large companies. It was then tried and has been successful for commercial real estate. I recently put a 12 unit apartment building for sale at the lowest price I would accept - about $40K under market - and had 14 offers, 5 all cash at list price. In the second round of bidding high offer was $10K over asking.
In order to be successful this method requires that the seller be very realistic as to selling price. In other words the sales price could be significantly different from what the appraised value is, the seller's opinion of value, or the value of the property if marketed over a six month period of time. Instead of finding the "right" buyer within six months or a year, this method sells to the high bidder TODAY. The method in cold or warm markets will yield less then it would using conventional listing methods - in very hot markets it can yield more. One of the main attractions for property owners is to sell now rather than 6 months from now may save significant monthly cash outlay.
The feasibility of this auction method for single family homes is less clear. Whereas the sale of businesses or commercial properties is to investors, the sale of single family residences is usually to a user. When buying a home for their own use, a different set of criteria is used than when purchasing an investment property. I have purchased homes for my own use at prices I would never have come close to being willing to pay for investment property. So the expectation of price for a single family residence is much higher than it would be for a purely investment property. Meaning the emotional factor must come into play. Buyers attracted to this auction method are usually buyers in which financial considerations are foremost - they will in all likelyhood not be the emotional buyers who would pay the highest price.
- Don Konipol
