Hopefully there will be more acceptance of using the auction format to sell houses.
All that is needed are sellers who will accept whatever price the market will bear. Will the sellers trust that an auction would produce the same results (or better) than a traditional listing?
Another benefit of an auction is that the sellers know what day the house is going to sell, and can make plans accordingly. It’s usually inconvenient to sell your house, at least you would have some time parameters. Then take two weekends off so we can conduct open house leading up to the auction, and on a Sunday afternoon at 1:00pm we’ll gather everyone around and see what the market will bear.
If there were sellers willing to try, I’d like to help. If we can follow a few auctions that work so people might feel more comfortable with the process, maybe we could start something here:
Auctions are standard in Australia.
How do you do the contingencies and repairs, though? What if some guy wins the auction and then tries to go overboard on repair credits? You have to do them as is, I guess, subject to a take it or leave it inspection?
The Sol Terra ones are even cheaper than that (and smaller I think, but 3 story stacked and packed).
What are the pros/cons of the “undisclosed min. bid & open bidding” vs. “disclosed min. & sealed bidding”? The latter seems like it’s closer to the normal sales process.
JTR – In auctions I’d suggest qualifying bidders ahead of time, then providing them secure on-line access to all reports including a Prelim Title, termite, maps, have the corners staked/plotted, HOA docs, etc.
Then you have a record of them logging in and downloading all the info ahead of time and those contingencies can be signed off on prior to submitting their bid.
Have them perform an inspection by their guy the day they are selected and then negotiate any concerns right then and there…done.
That’s effectively how we have to do some commercial deals with the banks..all ahead of the offer.
Further suggestion have a home inspector prepare a report on the house, and have it available.
W.C. is right about auctions in the Australian housing market. I remember a tour guide telling me that when I asked about housing prices when we were visiting Sydney years ago. I think it’s a great idea. It might be worth your time to visit a few Australian real estate websites to gather more ideas. I think we’re just set in our ways and simply used to the way we buy/sell real estate. Auctions could save everyone a lot of time/hassles.
Lyle – sounds good in theory, however, you (read: JTR) would assume liability for providing that report and for anything that was missed by the inspection.
Hence, it is always advised to have the buyers perform their own inspections and keep yourself free from any representations to the contrary.