Sell Your Home … in Five Days!

One of the main problems facing sellers in a cooling market with slowing sales is the long period of time homes spend on the market. Instead of waiting months to maybe receive the price you were hoping for, how would you like to sell your home in just five days - at full price or near it, and pay no broker commission?

Bill Effros has written a book that discusses this possibilitiy. It raises the issue of auctions and is titled (quite aptly), “How to Sell your Home in 5 Days.”

Here’s how it works:

• On Wednesday, sellers start promoting the sale through newspaper ads, signs, and other media. These say that the property will be awarded to the highest bidder following a two-day open house that weekend starting Saturday.
• The sellers set startlingly low starting prices.
• They have all open-house attendees sign in and place written bids on the sign-in sheet.
• Next, they stage the round-robin bidding after the open house closes on Sunday, calling each person who penciled in a bid, and asking if they want to increase the bids. Although that may sound tedious, for most sellers it’s very exciting.
• Repeat until there’s but one bidder left.

The popularity of real estate auctions such as this is soaring. According to Dennis Cruz of the National Auctioneers Association, the number of residential auctions rose 8.4 percent in 2005, to sales worth $15 billion.

Pricing your home properly

Key to the book’s strategy is to low-ball the starting price to get people’s juices flowing. “In traditional real estate transactions, we start artificially high and work down,” says George Cappony, who runs www.5-daysale.com. “Here we start artificially low and let the market tell us what the house is worth.”

Joe Crump, a real estate investor, reports he’s employed the method 13 times and that it failed only once, on a property in San Francisco, where he wasn’t able to generate enough responses to his advertising and marketing efforts.

“Otherwise, I figure I received between 93 percent and 95 percent of market value for the other 12 sales. When there’s no broker’s commission, that’s full price,” Crump says.

Five days, Great deals

For sellers, the great advantage is convenience and speed. Another attraction, say fans of the strategy, is that everything is above board. You can have an inspection done before the sale and the results are given to all interested buyers. Everyone knows how much the bids are. The competition is between buyers.

It also eases pre-closing problems. The winning bidders know that there’s other bidders waiting in the wings so there is less griping about fixing or being compensated for small problems.

The biggest financial advantage is that the method enables the seller to save on broker commissions and fees. And if the final sale price does not bring what the seller originally thought the house would bring, that may be due more to unrealistic expectations than a faulty method.

Summary

So, should this strategy be employed in the Florida home loan market? It’s certainly worth considering. As you confront the housing bubble, auctions may be the fastest, most reliable way to sell your home.