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CFD members,
I’ve already written a private message to Jackie thanking her for sharing her expertise on Highest Bidder Sales. I had an option on an SFR nearby and conducted a HBS last month and two weeks ago we closed for a number that exceeded expectations. It is an ingenious sales tactic and the manual that Jackie provides to CFD members spells it out in complete detail how to do it and what to expect. Plus, the assistance of people on this forum is invaluable.
For what it’s worth, a few lessons from my first one:
1) Don’t call it an auction. Some of my helpers started calling it an auction and I did get some flak from realtors and auctioneers for using the word auction. I pled forgiveness rather than permission but will be more careful in the future. Incidentally, one realtor told me I couldn’t even call it a high bid sale? Has anyone ever come across this?
2) Signs, signs, signs. I must’ve made somewhere between 100-150 signs and put them up in as many different places as I could. Home Depot or Lowe’s sells posterboard in great big 8 x 12 sheets that you can cut through easily enough with a pocketknife. Two days before the sale I was making signs in the parking lot of the Home Depot and then tacking them up on telephone poles around the sale (HD and Lowe’s parking lots are great places to put up a lot of signs). However, people do yank them regularly. This was a problem until I made one of these “sign staplers” that lets you put the sign up high. Well worth the investment. Here is a YouTube video:
https://bit.ly/2MIStlFI probably had 150 to 200 people come see the house and I reckon 60% of them came from signs with the rest being flyers and social media.
3) Spell out the terms of the sale explicitly and make sure bidders understand. I had far too many buyers trying to haggle with me by putting down a big number and then thinking they could renegotiate the price after the fact. Next time going in I’ll make sure that everyone knows my way is the only way a sale will happen.
Still, all in all, I chalk this one up as a win and would once again like to thank Jackie and other CFD members for sharing their experience and expertise on this excellent way to sell a house.
Hey Jeff
Thanks for the report on your HBS. You learned some great lessons… especially that you need a LOT of signs and never call a Highest Bidder Sale an auction.
What was the strike price on the property?
What did you advertise if for?
What did you sell it for? Was that close to market value?
How many bidders?The great thing about a Highest Bidder Sale is that you can make a big profit without even owning the house. Though a HBS is a great way to sell a house that you already own too.
Highest Bidder Sales work on old run down houses but they also work on nice houses in great condition too – and land and mobile homes and commercial buildings. You can use the Highest Bidder Sale technique to sell just about anything!
Hey Jeff
The HDS System is awesome. They work great. As for your realtor problem. We have always called it a HBS and have had one or two realtors tell us it is illegal. I simple said. “show me where it states i can’t sell my house how i choose? and or “you can call and try to report us. but it isnt illegal and the house will be sold by next week. wouldnt you rather make an offer and get a deal. ” Now this is in Texas. But we very rarely have any problems. We have done a lot of HBS and love when we get the chance. We are about to do our 2nd this year. The first we make $32k in less then a week. It is great to hear some one else using the system.
TK
Jackie,
Your manual was what helped bring the whole thing together but the experience of actually doing one did hammer home important lessons. To answer your questions:
What was the strike price on the property?
The strike price was the balance of the mortgage plus $5K. The house was abandoned and I needed to do an eviction to get empty and ready for sale.
What did you advertise if for?
$100K OBO
What did you sell it for? Was that close to market value?
The closing was for $175K. The house probably needed $30 K in rehab and renovation and ARV in the area is anywhere between $225K and $325K depending on how extensive is the rehab.
How many bidders?
Like I said, we had somewhere between 150-200 visitors and ended up with 75 bidders.All told, I probably had about $3 K of my money tied up in the property so the money I made to release my option was a phenomenal ROI!
Rob,
Thanks for the advice! I like that idea of telling them to show me chapter and verse. To be honest, nobody was really hassling me so much as pointing out that I should not use the word auction. Pleading ignorance seemed to work and, as you said, most of the realtors were more interested to see if I had another wholesale opportunity in the pipeline. Your tips here on the forum along with Jackie’s manual or my Bible to get through the sale and ultimate success. Best of luck with your next sale I hope I have the opportunity to share another soon.
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Some precautions about using bandit signs:Having fought many years ago in the bandit sign wars, I think some words of warning are in order here.
There are a lot of cities with ordinances banning bandit signs, particularly on power poles, in street median strips, on city sign posts, etc. In some cases the penalties are somewhat mild, but in others a $1,000/day/sign fine is pretty ugly. In some cases, there are state laws as well.
Much of this is political. Often there are permissible exceptions for garage sales, lost pet signs, etc — and of course, political campaign signs are almost never prohibited. But otherwise, the hatred for entrepreneurial activities is evident. Where I live, the restrictions on signs for an open house prohibit signage during the 5-day workweek, and only permit signs to go up from one hour before an open house to one hour after it ends — which kills HBS sign promotion here.
And there’s more. Many cities encourage locals with time on their hands to tear down such prohibited signs whenever found on “public” property. Often there is a permissible exception if permission is obtained from a private property owner for placement there.
There’s even a somewhat nationwide organization allied with prohibiting cities, here:
where you can see their dripping hatred over politically unacceptable signs.
In areas where the fines are steep enough to interest local law enforcement, be prepared to screen phone calls from such fine money seekers impersonating honest citizen inquiries. That means using untraceable VOIP phone numbers, eg. You have to decide how much risk is worth taking.
Also, to foil the occasional sign destroyer, I would hinge a heavy duty stapler onto a long pole with maybe about 10 degrees of allowable hinge travel. I’d load a fresh sign onto a hanger system (a cross-bar with a strong loosely hung cord from end to end, with two office paper clasps to hold the sign on the way up, but not so strong that after stapling, those two clasps would release their grip on the sign after I had stapled it onto a wooden pole / tree / whatever perhaps 20 feet up in the air — and after giving that long pole a swift push upward. That’s the quick and easy way to put out a lot of signs. Getting a ladder or something similar to tear down such a highly placed sign is a lot more work than all the most fanatical sign destroyers care to put in.
What worked best was one person driving the pickup, at night, and the other person reloading the pole stapler system, then jumping out, slap/stapling the sign on the chosen target, and then putting the pole stapler system back on the truck (an overhead rack works really well), climbing back in, so the driver who left the motor running … can be on his/her way quickly.
–Dee
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One link from that bandit sign hater’s website is full of information about the tools they recommend for the uber-fanatical sign destroyers, here:https://www.causs.org/tools.html
That’s just to let you know what you might be up against.
–Dee
Thanks, Dee. You’re correct, the city and county where I live have their minions out and about to catch people using bandit signs. Also, other wholesalers will often trash competitor’ s signs. The YouTube video I linked to above shows how to build a sign stapler as you described. Tacking the signs high on the telephone pole combined with the innate laziness of code enforcers allowed me to get away with having a lot of signs up over the weekend. The Monday following I had a long day driving around and collecting all the signs but that was better than getting a fine. All’s well that ends well and I consider this a live seminar in guerrilla marketing 101.
In most areas, code enforcement is not out on weekends, that’s why I advise putting signs our late Friday, leaving them up all weekend, then either take them down late Sunday or early Monday morning.
Even with the ordinance against signs, I have rarely had a problem.
One time in Plano Texas, Code enforcement took down the signs during an open house. So, I used “people” signs instead. They held signs on tall stakes and I made a sandwich board. Assistants walked up and down major roads holding the signs and pointing to where people needed to turn to find the open house. It worked!
Another time, at Lake Dillon Colorado,Code enforcement called to tell me I needed to pick up the signs at their office. They said, I know you spent a lot of money on these signs so I know you’ll want them back. For that open house, I put signs in the windows of cars that were strategically parked along the main road leading to the house. It worked.
Code enforcement will not touch signs on personal property. So, I’ve also asked homeowners or business owners if I could put a sign in their yard with the promise that it would be gone Monday morning. That works too.
There is always a way!
Don’t let code enforcement sign rules scare you away from doing a Highest Bidder Sale. There is always a way to display the signs to get the word out about your open houses.
I’ve had more problems with realtors taking my signs down than code enforcement. I’ve caught many of them in the act! Other wholesalers will take your signs down too.
Always… always ..have at least an extra 50 signs to put up to replace the signs that disappear. You can buy blank coroplast signs to have on hand. A big fat magic marker, wooden stakes, and a staple gun are all you need. In texas, I preferred using the metal H stakes because the ground is too hard to get wooden stakes in the ground sometimes. You can buy the blank coroplast and H metal stakes at a sign shop.
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