Bill Wendel of The Real Estate Cafe drops by to chat.
John,
Your site looks very impressive and comprehensive these days. Congrats on both that and your ability to generate so much content!
With respect to this post, I am somewhat familiar with Bill Effros approach to selling in five days so am surprised to read, “Most important: have a reserve, so in case bids come in low, you can back out without everyone getting mad at you.�
Doesn’t Effros recommend starting out with an unbelievable LOW asking price, with NO reserve precisely to get hundreds of people to attend an open house that otherwise would not have captured their attention?
A former city councilor in Cambridge tried this auction technique about a year ago, and it appeared to be a smashing success attendance-wise, anyway. My recollection is that he opened with approximately 18 bidders in the round-robin process you describe.
If you or your readers like, I can try to find more detail. I could be wrong, but I don’t think he lost “the entire profit on the largest investment of your life.�
I haven’t read Bill Effros’ book, but it sounds as though Mr. Wendel has. He’s probably right.
The writer of the CNN/Money story I referred to interviewed an investor who did set a reserve when he sold his property using the 5-day plan, but apparently that was his own decision, not something he read about in the Effros’ book.
Joe Crump, a real estate investor, reports he’s employed the method 13 times and that it failed only once …
… He reports little downside and always uses an undisclosed reserve as a hedge. “It works just like on eBay. If I don’t reach that [reserve], I don’t sell the property.”
Source: A 5-day plan to sell your house: More Americans are using auctions to sell the property. Is this strategy for you? – By Les Christie, CNN/Money
