Weekend Round Robin Auction

[TerryKruse]

We held a Round Robin Home Auction over the weekend.

I had an option on a really pretty renovated home in a great Calgary neighbourhood. This option was only 8 days from the weekend open house. I made the sale this soon as I didn`t want to get into December. Maybe Grey Cup weekend wasn`t the best time but I had a lot of people on the Sunday...

We held a weekend open house and the auction on Sunday evening. We distributed flyers throughout the week, ran ads in Kijiji and the Calgary Herald and put about 40 (ugly) signs up around the area. Our 2 sets of 3 teenagers at a neighbourhood fitness center and mall brought lots of people to the home.

The seller was ready to move and had decided to call my online ad as a last effort before listing again - (she had listed with a realtor over the summer , a type who gives realtors a bad name). She didn`t have furniture in her living room or master bedroom. I tried to rent furniture but this was difficult as this was last minute. We put our own living room furniture in the living room (fit perfectly in her house), used a double blowup bed in the master. Bought a couple of pictures for $50 each, and bedding that was on sale from Home Sense. I bought lots of fresh flowers for the bathrooms, kitchen, dining room and on the side tables in the master. I made cookies - Pillsbury ready made, taste great and made the home smell delicious.

The seller got a property inspection and we displayed it for people to look through.

We had a fantastic Mortgage Broker in the home who brought a great rate on a fixed and a prime minus variable rate. We allowed/encouraged him to sell his services and it also helped with the home.

We had over 100 people in the home over the weekend. A lot were from the neighbourhood and were curious. Others from signs, our teenager`s enthusiasm and other sources.

We had a great response from the visitors yet not a lot of bids. Bidding came up to $6k over our option price - with a financing condition. This is now in the Brokers hands.

This is what I would do different next time:

Give ourselves more time. It was exhausting yet exhilarating.

Hold the open house from 12 to 4pm rather than to 5pm. Although we had no one from 4 to 5 pm except our ultimate buyer...

I would hold the open house over 2 weekends - giving people more time to think and maybe come back a second time. This would also give people more time to investigate the value of the home. People seemed to have a problem with the relatively new concept. This would help to alleviate some of the fear.

Then hold the Round Robin as normal or the next day.

Yes, I would try to get a lower option price.

This is my experience and I really think it is one of several great tools in Quick Turn Real Estate. It was 9 days from the date of our option to sale. That is pretty quick turn...

Terry

 

[JimWhitelaw]

Thanks for sharing your experience, Terry. Kudos for taking action and making it happen. Using your own furniture! That`s dedication to your cause. Love it.

Don`t forget to celebrate!

 

[WJW]

Great job Terry!! I`ve done several auctions over the past year or so and thought I`d share a couple things that I`ve learned along the way.

QUOTE (TerryKruse @ Dec 1 2009, 12:11 PM) We held a Round Robin Home Auction over the weekend.

I had an option on a really pretty renovated home in a great Calgary neighbourhood. This option was only 8 days from the weekend open house. I made the sale this soon as I didn`t want to get into December. Maybe Grey Cup weekend wasn`t the best time but I had a lot of people on the Sunday...

We held a weekend open house and the auction on Sunday evening. We distributed flyers throughout the week, ran ads in Kijiji and the Calgary Herald and put about 40 (ugly) signs up around the area. Our 2 sets of 3 teenagers at a neighbourhood fitness center and mall brought lots of people to the home.

The seller was ready to move and had decided to call my online ad as a last effort before listing again - (she had listed with a realtor over the summer , a type who gives realtors a bad name). She didn`t have furniture in her living room or master bedroom. I tried to rent furniture but this was difficult as this was last minute. We put our own living room furniture in the living room (fit perfectly in her house), used a double blowup bed in the master. Bought a couple of pictures for $50 each, and bedding that was on sale from Home Sense. I bought lots of fresh flowers for the bathrooms, kitchen, dining room and on the side tables in the master. I made cookies - Pillsbury ready made, taste great and made the home smell delicious.

The seller got a property inspection and we displayed it for people to look through.

We had a fantastic Mortgage Broker in the home who brought a great rate on a fixed and a prime minus variable rate. We allowed/encouraged him to sell his services and it also helped with the home.

We had over 100 people in the home over the weekend. A lot were from the neighbourhood and were curious. Others from signs, our teenager`s enthusiasm and other sources. This is amazing! You obviously know how to generate a lot of interest...great job!

We had a great response from the visitors yet not a lot of bids. Bidding came up to $6k over our option price - with a financing condition. This is now in the Brokers hands.
Use a short form that requests the buyers name, phone# they can be reached at when the auction begins, and starting bid. (we say starting bid can be $1 just to get them in the bidding)

This is what I would do different next time:

Give ourselves more time. It was exhausting yet exhilarating.

Hold the open house from 12 to 4pm rather than to 5pm. Although we had no one from 4 to 5 pm except our ultimate buyer...
We hold our open house between 12pm and 4pm.

I would hold the open house over 2 weekends - giving people more time to think and maybe come back a second time. You need to create a sense of urgency. I would recommed you stick to holding the open house on 1 weekend only. This would also give people more time to investigate the value of the home. ro:#ff0000-->You need comps at the home. Ask a realtor or if your mortgage broker has a relationship with a realtor ask them for it. People seemed to have a problem with the relatively new concept. [/color]This would help to alleviate some of the fear. We put a disclaimer in the bidding form that there bid is not legally binding and also there is an undisclosed minimum reserve price. The winner of the auction will have an opportunity to do their due diligence. We will meet the day after the auction to put together the legal offer.

Then hold the Round Robin as normal or the next day.

Yes, I would try to get a lower option price.

This is my experience and I really think it is one of several great tools in Quick Turn Real Estate. It was 9 days from the date of our option to sale. That is pretty quick turn...

Terry

You`re right that you need more then a week. I`ve found that 2 weeks is the best time frame because it gives you enough time to prepare and market the property plus potential buyers can see that this home needs to be sold now and it builds up alot of eager buyers. Let me know if you have any questions. I`m happy to help.

 

[antaynguy]

Hi,

Great job for taking actions!!

Putting your own furniture LOL!! You must have a big truck and some muscle aswell.

Very inspiring!!

Antay

 

[Sandy Fransham]

Hi Terry;

My fingers are crossed that the financing goes through! I thought your signs were fantastic! I saw lots of them out in our community.

It only takes one buyer right!

Sandy

 

[Avoidconfusion]

Great work Terry!
Thanks for sharing all that great information. I was planning on trying this with one of my quick turn properties, when I get one. I will try this to maximize the interests and to move it quicker for the best price.
I was also going to make this part of my business to help others maximize the value for their homes. I need to learn more about how the Option works, I am new to the Quick turn. Hopefully You will be at the REIN meeting tonight.

Kevin Redmond
Avoid Confusion

 

[GordonDaniel]

Congratulations Terry and Mark!! Way to Go!

Gord

 

[TerryKruse]

QUOTE (WJW @ Dec 1 2009, 12:16 PM) Great job Terry!! I`ve done several auctions over the past year or so and thought I`d share a couple things that I`ve learned along the way.



You`re right that you need more then a week. I`ve found that 2 weeks is the best time frame because it gives you enough time to prepare and market the property plus potential buyers can see that this home needs to be sold now and it builds up alot of eager buyers. Let me know if you have any questions. I`m happy to help.


These are great points Walter. I will take them into consideration on my next Round Robin. Again, one of several tools.
Cheers, Terry

 

[TerryKruse]

There has been a snag...

The buyers original lender flatly refused to look at the file for 2 reasons:
1. Private sellers are the leaders when it comes to bank fraud
2. They were further uncomfortable with me in the middle.

The mortgage broker is resubmitting the application to another lender omitting me in the process. I am getting the buyers (I hope I don`t scare them away...) to sign a new agreement with the original seller. The original seller is signing an agreement buying my option back for the amount over the option. This will come out of the proceeds.

Thank you so much Barry McGuire - as there just happened to be a REIN meeting within an hour of this happening.

The original seller is cooperative with the process. She knows how hard we worked and how quickly we sold her home - technically our home through the option.

I am meeting the buyer this evening and hopefully this will go through.

Just one more hurtle and another learning experience.

Cheers, Terry

 

[Youngdue]

QUOTE (TerryKruse @ Dec 2 2009, 11:29 AM) These are great points Walter. I will take them into consideration on my next Round Robin. Again, one of several tools.
Cheers, Terry

Congratulations! Great Work. I hope rest of the process goes well.

-Karma

 

[CarrieKoch]

Great job!!! Way to yank out the snags!

 

[neill]

Wow, great post, and thanks for sharing - let us know the final outcome, and congrats....

Lynda and I have a house that we are close to closing on (will share it when it is done....), and this could be the exit that we use....

 

[GStroud]

QUOTE (JimWhitelaw @ Dec 1 2009, 10:36 AM) Thanks for sharing your experience, Terry. Kudos for taking action and making it happen. Using your own furniture! That`s dedication to your cause. Love it.

Don`t forget to celebrate!


I sure hope you did celebrate! thanks for showing me that courage to being different is possible.

I am so thrilled to hear that you`ve done this. I want to do the round robin auction in October and got talked out of it. I have decided to do it Jan. I have a condo/t/h that I am determined to move . It would be great to have as part of my time if you are interested.
Let me know if you and your kids are interested in becoming Calgarian round robin professionals.
gail
250-743-4432

 

[TerryKruse]

Fortunately, I was able to get all of the appropriate papers signed between seller and buyer. The hard work from the Mortgage Broker paid off. The financing condition was removed last evening (Dec 8) and the sale should go through in January.

One thing I did become aware of, was that I was now responsible for the interest of both parties. It was no longer me trying to get a paper signed by the buyers.

In the original buyers mortgage they were getting a prime minus variable. The broker: Leonard Bercovice was able to get the buyers a comparable rate at another bank (I will put his contact info on the Resource Directory of this forum - he was exceptional). I would have been (morally) responsible for the higher rate if they were unable to secure this rate from another bank.

Also, make sure you put buyers requests into the contract. The buyers requested a second viewing the next weekend. I got a verbal okay from the seller (twice), didn`t put it into the contract and found the seller giving me a lame excuse why they couldn`t visit during that time. I was finally able to secure this for the buyers, but I now have a much greater respect for the work realtors do.

Thanks for all of your replies. I do appreciate the encouragement.

Terry

 

[antaynguy]

Hi Terry,

Great Post!! Thank you so much for sharing your experience.

A couple of question for you:

1) What was the price range of your property and how close percentage wise to the actually ARV with the final bid?

2) Your "snag" with the bank, which bank was having issue with this? Is this typical with all banks?

3) You mentioned that you are responsible for the interest of both parties, can you elaborate on this? I don`t understand how you could be responsible for the interest?

Thanks!

Antay

 

[TerryKruse]

Great questions Antay. Answers below.Cheers, Terry


QUOTE (antay @ Dec 21 2009, 04:44 PM) Hi Terry,

Great Post!! Thank you so much for sharing your experience.

A couple of question for you:

1) What was the price range of your property and how close percentage wise to the actually ARV with the final bid?

The price was in the mid $500k. and I didn`t make anywhere near the ARV (no repairs were needed as the home was pristine). I think the price could have gone higher if I had done as WJW said and "put a disclaimer in the bidding form that there bid is not legally binding" and also there is an undisclosed minimum reserve price. The winner of the auction will have an opportunity to do their due diligence."

I also think the "newness" of the auction process prevented the price from going higher."

2) Your "snag" with the bank, which bank was having issue with this? Is this typical with all banks?

The bank was through the mortgage broker and I am unsure which one it was. Because the first bank flat out refused to look at the application, we - the broker and I - thought it best to rewrite the contract rather than risk losing another bank.

Although the first method was legal, from the banks perspective the largest percentage of fraud comes from private sales. Not only was this a private sale, it had the other elements: the option and the fact that although I had a financial interest, they did not see me on title.

3) You mentioned that you are responsible for the interest of both parties, can you elaborate on this? I don`t understand how you could be responsible for the interest?

What I meant by this is that I am now the agent for both parties (if I was a realtor it would be dual agency) and I have to make sure the seller/buyer gets what they want/need. You are no longer acting just for the seller. You must act as an agent and potentially go back to the seller/buyer and make sure you write everything in the contract. It is no longer about getting a good option price for the property.

Thanks!

Antay