Why not privately held home-sale auctions? (sales, foreclosures, insurance)

[beach43ofus]

Homes in our area are selling like hot cakes. I'm seeing the nicer new listings go pending in just 1-3 days.

Based on comps, our home has increased in value 32% in 2.5 years....and it's still climbing.

Some new home builders are 10-11 months out from close, to move-in. It's a White-hot sellers market.

If I were to sell our near-new home today, I'd hold an "as is" cash auction, like they do on foreclosures.

No realtors, and no home-inspection Monkey business.

I'd hold the auction myself, and do it on my own front steps, instead of at the Courthouses front steps.

All bidders would need to qualify, and place a large deposit into escrow. I'd hold 1 open house for 2 hours for viewing after the deposit is made.

Before they put down their deposit, they can go look at the model home at our sales center to see what our home looks like.

In this environment, why aren't more sellers doing this?

I think a lot of sellers are leaving a lot of money on the table.

[Lillie767]

When I listed my house, I had ten scheduled viewings on the first day. Received a full price offer same day. Highly qualified buyer, putting 20% down, already lived in town, getting a bigger house. Perfect buyers. No contingency on selling their house. Pre-qualified for more than my asking price.

My broker asked if I wanted to wait for the bidding war he was sure would happen. I said no. Accept the full price offer and let's get to closing. From listing to closing was six weeks. I've never regretted accepting that offer. I might have left money on the table, but I felt that the broker had listed a fair price for the house. Fair is fair; I wanted to sell the house at a fair price. Not looking to gouge hungry buyers.

I made money on the sale and drove away happy that I had not contributed to the feeding frenzy of home sales. The ethical solution does not always maximize profits.

"Sometimes the value that consumers place on a good is much greater than the cost of producing that good. In such cases, there is controversy about whether the corporation is justified in charging a much higher price and matches the perceived value. This situation can take place during a shortage, such as the price of food or fresh water after a hurricane, or when a certain product is the only one of its kind available. Pharmaceuticals and the patents that surround them are a great example.

Producers in these instances can charge an exorbitant amount of money, but should they?"

https://www.priceintelligently.com/b...-ethics-issues

[beach43ofus]

I do not see auctions as being unethical at all. Nobody is forcing participants to pay top dollar, & there's is nothing wrong with sellers trying to insure they sell at top dollar. That is the free market at work, in its purest form.

Patented medicines are a flawed analogy. Big pharma pays big R&D, and reg costs to bring meds to the marketplace. The patents expire rather quickly, and the government can intercede when needed like they did with the Epi-pen.

Stocks are traded on the trading floor which is basically an auction. Do you own any stocks?

If I were to sell now, I'd hold an auction, get top dollar, and feel awesome about it. I'd be maximizing my ROI, and harming nobody.

[photoman_6]

nobody is going to put down a deposit before viewing the house, and looking at a model doesn't tell the real story.
I think an auction is a good idea, but I would not restrict it that tight. Hold a two hour open house before the auction, advertise the sale in the paper and zillow at least a week before, and specify cash offers will be given priority.

[Lillie767]

Originally Posted by beach43ofus

I do not see auctions as being unethical at all. Nobody is forcing participants to pay top dollar, & there's is nothing wrong with sellers trying to insure they sell at top dollar. That is the free market at work, in its purest form.

Patented medicines are a flawed analogy. Big pharma pays big R&D, and reg costs to bring meds to the marketplace. The patents expire rather quickly, and the government can intercede when needed like they did with the Epi-pen.

Stocks are traded on the trading floor which is basically an auction. Do you own any stocks?

If I were to sell now, I'd hold an auction, get top dollar, and feel awesome about it. I'd be maximizing my ROI, and harming nobody.

What a wonderful country in which to live. You can hold your auction without qualms and I can sell my house at my fair price.

[blueherons]

Most people have to have a mortgage to buy a home.

You cannot get a mortgage without insurance.

You cannot get insurance without an inspection.

[beach43ofus]

Originally Posted by photoman_6

nobody is going to put down a deposit before viewing the house, and looking at a model doesn't tell the real story.
I think an auction is a good idea, but I would not restrict it that tight. Hold a two hour open house before the auction, advertise the sale in the paper and zillow at least a week before, and specify cash offers will be given priority.

Invstors do this every day all day for foreclosures, which are much riskier. If they dont pay a dwposit, they must proove a cash balance in an account, which is nearly the same thing.

I rate your comment as mostly false.

[graceC]

Originally Posted by beach43ofus

Invstors do this every day all day for foreclosures, which are much riskier. If they dont pay a dwposit, they must proove a cash balance in an account, which is nearly the same thing.

I rate your comment as mostly false.

Well, foreclosures are different since they're usually sold at below market price and it's already known that the person who buys it may even have to re-gut the house.

I'm not saying your idea won't sell, because there are enough people out there who are caught up in this frenzy and will do anything in their power to get what they want.

[beach43ofus]

Originally Posted by blueherons

Most people have to have a mortgage to buy a home.

You cannot get a mortgage without insurance.

You cannot get insurance without an inspection.

Most home buyers at my homes price point (~$750k) are paying cash, and near new homes like mine are so scarce right now, I'd have no problem at all finding 10 cash bidders. My Sales guy told me 75%+ of the buyers are paying cash now in our part of the development. My development was 11 months out before they ceased taking orders for new homes, even though many lots still exist. Bottom line, you cannot buy a new-build inmy development right now at all. I have no doubt my auction would be a huge success....but we're not selling now anyways. A lot of people who are, should consider a by-owner auction if they have a highly desireable home in a highly desireable community.

I bought an exotic car on auction, & had to pony up a deposit to bid, so affluent people are accustomed to this kind of thing.

[PBToast]

That kind of auction was happening a number of years ago in my area of the country, mainly for homes in the $1M+ range. Not development homes but more like estates. I'm thinking it was back in the last big run-up. Fancy realtors like Sothby's would advertise the sale and in order to be admitted you had to submit financial information on how you would pay beforehand. (otherwise I would have sneaked into the sales just to see the houses, LOL!) Usually there would be a 2 hour open house beforehand. Sometimes potential buyers were asked to submit sealed bids. It's not like there were that many of them, but some owners of large homes apparently took the chance. It's often harder, and takes longer, to unload a really substantial property.