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As a follow up to the conference call last week, at Jackie’s suggestion, and inspired by the area 253 caller, I am planning a Highest Bidder Sale next weekend, June 23-24.
My question is: since there really isn’t a house left to show, how do I adjust my HBS? I have nothing for a buyer to walk through.
I do have some sketches for the rebuilt home that the contractors provided in their proposals.
I was considering blowing those up real big and putting them on an easel in front of the house during the visiting portion of the HBS.
At least a prospective retail buyer would get some visual idea of the possibilities.
Here’s what I thought my priorities would be:
1. Present this opportunity at a real estate investors meeting this week.
2. Ask one of the contractors to be at the HBS to field questions about the potential for construction.
3. Deciding if I will sell this “as is where is”, or if I sell an option on the insurance settlement. The first option is preferable, but the second option might be more profitable.
4. I hesitate even mentioning this one, but calling realtors who have been the selling agent for area homes so they can let their buyers know about this custom build opportunity. I would, of course, co-op a realtor commission if they bring me a buyer.
In the meantime, I’ve been talking to all the contractors about them buying the option and selling the new spec home. I’ve also been talking to other investors.
I’m not very creative when it comes to marketing. I’m not even sure what to share at the RE meeting.
And it gets really crazy when I talk about the other property I have on the same street that I’d like to sell as part of a package.
It seems I have 4 distinct marketing approaches, wholesale, wholesale with option to rebuild, retail, and a combination wholesale with option to buy the other property. The only approach I’ve eliminated is rebuilding a spec house. I’ll leave that for the builders/contractors to tackle if they are inclined.
I welcome any critiques and suggestions.
Another thought that just occurred to me would be to rent a conference room near the house and have the auction there, with directions for those who want to see the property.
I could set up the contractors proposed drawings along the walls of the conference room (in the event I get any retail buyers).
I can’t think of any other dog and pony tricks.
Good luck with your higgest bidder sale. If does not go well I have an idea. Offer to just give away the property with an option to buy back latter at what ever terms you can work out with the new owner of the property.
What you are really selling is a lot with a house that needs to be demolished. Bidding probably needs to start at the lot value as listed on the tax records.
I don’t know about getting an option on the insurance proceeds. But if you can do that, you need to include it in the marketing. You might check with your insurance company to see if the proceeds can be assigned if you sell the property.
I’m still struggling with how to conduct a Highest Bidder Sale at a location that, for all intents and purposes, no longer exists.
I feel like I have 3 distinct strategies
1. Sell the lot to a wholesale (a builder?) or retail (someone who would bring their own builder) buyer
2. Sell the lot and the house down the street to an investor
3. Sell the lot and the insurance proceeds to a retail buyer
Do I set things up in front of the house?
I’m working on getting a builder and a mortgage lender to attend an HBS. I’m not sure I want to tie up their days at a location that smells unpleasant and will be hot.
I could arrange a cook out if that would help get people out. I just want to be sure I’m using the right marketing to the right target group.
or have the highest bidder sale for the house down the street and throw in the lot as a free bonus
I doubt you’ll get a retail buyer for the lot.
Update on the “fire” sale:
After much consideration, I have decided NOT to rebuild the house.
One of the contractors has offered to buy the lot and tear down the house.
He’s asking me to pay off the mortgage and then transfer the Deed.
I’d be much more comfortable doing so if I have a signed Purchase Contract.
Do I use the Standard Real Estate Purchase Contract, with the stipulation that I will pay off the mortgage prior to Deed transfer?
I feel like the Buyer should be contacting a title company to do the title search and documents? At least that’s what I would do. Since he isn’t, and I don’t want to drag this out, what is the correct protocol to proceed?
write up the contract. Turn it in to a title company. Let them do a closing and only pay off the lender from the proceeds at closing. Do NOT do the deal outside of closing with a title company
I found a sample Standard Purchase and Sale Contract, which I completed and sent to the Buyer. My contract says that the Seller chooses the title agency. He saw that and called me, so I know he got the contract and I have his attention. Should go smoothly from here. My contract says we close by August 3. He told me he’s going on vacation August 10 so I know I need to put the pedal down and get this done. Thanks!
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