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I thought I would put this thread together to seek help and share my experience on my HBS. I bought a 2/1 house from probate towards the end of December last year for $72K. Looking back, I wish I had just turned around and done an HBS on it right then, but I thought I would flip it instead. My wife didn’t want me doing any more flips, so I convinced her that I would split the profit with my contractor if I did the financing and he did the work. I told the contractor that I would sell it on my own, but I get to keep what would amount to the realtor commission on it.
So far I have read through Jackie’s book and listened to a bunch of the training calls (Thanks Jackie!). I also headed over to WitnessDesigns and looked through their signs.
I am wondering which are more effective – pre-printed signs or handwritten Coroplast signs?
We are about 3-4 weeks from having the house ready. I will probably have more updates as we get closer to finishing it.
Would it also help if I also made some videos? Has anyone tried to video the days of the sale? Do potential buyers object to videotaping them?
You should do a virtual tour video to add to the highestbiddersale.com web site when you are ready to start doing the marketing.
hand printed signs work as well as printed signs on less expensive houses. But on median prices or higher, you need to have a professional look.
YOu should not do a video during the 2-day open house because you woul dneed to get video releases from each person.
Better to focus on selling the house.
Sorry I have not continued this thread in a while, but the rehabbing has taken longer than expected (doesn’t it always?). I’m working with Witness Designs to create the signs. I was wondering if people generally get one-sided signs or two? Also, do you put anything with the address on them, or can I just use the HBS website? Do you put arrows on your signs too? And will 50 be enough? Or should I order more in case some get taken down? Sorry so many questions. Witness Designs gave me a lot of options. Thanks.
It is much more affordable to print on one side. I do not get an arrow printed anymore but do get a thick black box at the bottom so I can add my own < or > or up arrow where needed.
Do not put an address on the signs. Then you can reuse them for the next HBS.
Let us know how it goes
What I did to put an address on them is bought some plain corrugated plastic sign material cut them in six inch height. I then took a paper punch and punched two holes in them and the sign. Took a zip tie and connected. I then on my computer in landscape mode printed out the address and taped it on the six inch extension for the sign. It work well. Believe it or not it rained and they held up rather well.
Ok. It looks like about 2 weeks until the flip will be finished. We have to just finish the trim staining, do paint touchups and fix some stuff on the outside.
My wife had an interesting question though.
Is this HBS more for investors or cash buyers only? Do retail buyers get scared by buying a house in an unconventional manner so it is difficult to get a retail price for it?
I guess that’s two questions.
If you think you will have retail buyers at the HBS it would be a good idea to have a mortgage broker attend to qualify buyers in need of a loan.
Yup. I already have that set up. I have a friend who is a good mortgage broker and he said he would be happy to attend. My question is more along the lines of whether the retail buyers will show up, or will they just be working with a realtor who will steer them clear of an auction like this?
Is it better to sell a fully-fixed up flip the old-fashioned way, or will retail buyers go for this?
Thanks for the response Don.
Some rehabbers distinguish clearly between a retail buyer ready rehab versus a rental investor ready rehab, the latter being much quicker to complete, with less cash needed, and quicker to sell — although for somewhat less than retail.
If a rehabber chooses the retail buyer ready rehab effort, expense and time allowed, but only advertises to or only attracts landlords or investors, s/he’s getting squeezed on both ends — highest cost efforts for the most holding cost for lowest returns. Obviously, there are other combinations with better outcomes.
It sounds from your description that you are rehabbing for a full retail buyer, but I’m not sure. I’m definitely not sure whether you are advertising to or attracting just the landlord or investor crowd (who would be unlikely to pay full retail unless they’re a hedge fund with nearly free Fed money), or just the retail buyer crowd, or some confusing mixture of both.
I certainly agree that if there’s a chance of attracting retail buyers, you need a mortgage broker at hand. I’m just not clear on which strategy (of those discussed above) you’re using, especially with the uncertainty of what kind of buyers you expect to show up.
Does this thinking help?
It does help Dee. I am definitely shooting for the retail buyer. The market is really good right now in the area of the property. I have quartz countertops, SS appliances, etc. I definitely don’t want to sell it to the landlord/investor crowd.
I have a mortgage broker who wants to be part of the showing times for the weekend of the HBS.
My question still is whether an HBS is a good technique to attract a retail buyer? Will they be scared off by the auction feel and want to go the traditional route of looking on the MLS with their realtor?
Just want to make sure – do retail buyers buy from HBS’? Or are they scared away from them by their uniqueness and want to go the traditional realtor route?
Just wanted to provide an update. I am kicking myself for not just doing an HBS to an investor on this house flip when I first acquired it, rather than spend the last five months fixing it up.
We are definitely in the home stretch. The hardwood floors need to be varnished. Then it will be a few little things and cleaning.
So I have been using this rainy Sunday to get all my documents together for the Highest Bidder Sale. Here is what I have been doing:
– Ordering signs and stakes from Witness Designs (their stakes were about the same as Home Depot, even with freight)
– Copying all the documents about HBS from Jackie’s book
– Creating my HBS flier (although I can’t figure out how to paste a text box over a picture like in Jackie’s example
– Running comps on the property
– Writing a Craigslist ad or two for the property
A realtor friend of mine thinks the property could go for about $240K. I thought I would start the bidding at $135K. After we finish it I will take pictures and create the virtual tour to post on the HBS website.
I couldn’t find any examples of CL ads on the CFD site, so I wrote my own. I was wondering if I am going on the right track with this:
Quartz Countertops, SS Appliances, To Be Sold On Sunday Night
Sq Ft 3BR 2BA $135,000
We have a beautiful, completely remodeled house that we need to sell quickly. Quickly as in Sunday night. We want to move on to another remodeling project and we need to sell this one. A friend of ours told us about a new way to sell houses quickly and we?re excited to try it. Thousands of houses have been sold this way throughout the country.
Before I explain how we will conduct the sale, let me first talk about the house. The house has three beautiful bedrooms, and there is an additional den/office or nursery off the master bedroom. The master and the second bedroom are upstairs and have stunning hardwood floors. The third bedroom downstairs has brand new carpeting, sheetrock walls and trim.
All the bedrooms have lots of closet space.
The kitchen and both bathrooms have been completely remodeled. For the kitchen that means:
? New cabinets with soft close drawers
? New stainless steel appliances
? New tile floors
? New Quartz Countertops
? Open concept feel with a formal dining room and
The bathrooms provide:
? New tile shower (lower bath) and bath (upper bath)
? New vanities with a double sink in the upstairs
? Heated, new tile floors with thermostat
? New toilets in both
Both bathrooms, the kitchen and every room in the house have new electrical and plumbing servicing them. You don?t have to worry about your power going out or your plumbing getting clogged due to old equipment.
Outside the main part of the house there is a 3-season porch with new cedar decking, new landscaping, and a 2-car detached garage with a brand new roof and garage door opener.
The whole house is heated by a forced air gas furnace with new ductwork. It?s cooled with central air conditioning.
Here?s How We Will Sell the House
We are trying something new to sell this house quickly. We are honest people who think this way might be better for both buyers and sellers than a traditional realtor.
We have sold a couple of other houses in the area. Here is some email feedback from the people who bought the last two houses:
?Thanks again for following through on all of the items on the purchase addendum and doing so so promptly and so willingly!? ? P.R.
?I really like the way you carry yourself as a Business man and as a Family Man? ? A.S.
To get the full scoop of how we are selling this property, please go to the website HighestBidderSale.com.
As a quick summary, we will be holding open houses on Saturday and Sunday (June XX and XX) from 11am to 4pm. You are free to inspect the property at this time.
If you would like to buy the house, you can just write down a proposed bid that is at least $135,000. Please write down your phone number as well.
We will also have a mortgage broker at the open house to help you qualify for financing or answer any questions you might have about a mortgage.
On Sunday night about 6pm we will call the person with the highest bid, inform them that they are the highest, and ask them if they would like to increase their bid.
Regardless of what they say, we will then call all the other people who submitted a bid and ask them if they:
? Would like to increase their bid above the highest bid, or
? Drop out of the bidding
The bids will continue in $1,000 increments until there is just one bidder left. That bidder will be able to purchase the house, as long as the bid meets our minimum requirement. We reserve the right to refuse to sell the house if the bidding does not meet the minimum.
You can find out more details at our Highest Bidder website. If you come by the open house this weekend, I think you will really like the way we are selling. We will have a professional inspection report on hand, and you are free to bring an inspector with you if you so desire.
I look forward to seeing you at your new home this weekend!
retail buyers will show up IF you price the house really low to begin with. the more people who show up, the higher the price will go.
If you price it too high in the ads, you will get fewer potential buyers and the price will not get bid up.
Besides, you do not have to sell if the price does not met your reserve.
hcranmer, you wrote:
“I am kicking myself for not just doing an HBS to an investor on this house flip when I first acquired it, rather than spend the last five months fixing it up.”
That one sentence is worth repeating in big black bolded letters, and is worth elaborating on for our CFD audience. I know of some very successful “flippers” who do minimize the amount of fixup they do — so they can sell very quickly to the landlord or investors market you mentioned. That keeps the cash needed to a minimum, and the cash lost to holding costs at a minimum as well. Any added detail, numbers and reasoning you can share would be well placed here.
retail buyers will definitely show up if you price the house right to attract them. Most will not be cash buyers ( unless the house is priced ofer $500,000_ so you need to have a mortgage broker on site during the HBS to pre-qualify them.
Surprisingly, houses which sell over $500,000 up to about $5,000,000 are usually cash buyers. That’s why I like doing HBS on higher priced houses what I have an option on.
Hal, what days are you planning on doing your HBS? I’m actually going to be in the cities in June to visit some friends. If weekends line up, i would be willing to help you through the process. It will be a learning experience for the both of us but you will have an extra hand.
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