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Jackie,
I listened to your conference call on Highest Bidder Sale and within a few days I got one. HOORAY!!!!! The house belongs to a 92 year old man who has moved 2 hours away to live with his son. Beside needing a little updating the house has a great floor plan, new siding, and roof and A/C are four years old. Comps in the neighborhood start at $42k and go up to $81k. My option agreement and strike price is $37k. With 14 “sold” in the last year 10 have been cash sales with two @ $64,900 and one as high as $73,500. Now my question…..The seller needs the money to pay off the existing mortgage of $17k and $10k for funeral expenses. Should I have asked if they would do owner finance? I certainly could get a big down and possibly drive the price higher?? What are your thoughts?
You also mentioned on the conference call that you have a mortgage broker present at some of your sales to qualify the buyer for a loan. How does that work? How do you get paid? You normally receive the down payment in cash and that is considered your assignment fee but if the buyers are getting a loan how does it work???
This is really fun now. I’ve had three calls in the last two days that would be perfect for a highest bidder sale. Two of them have been listed for months without luck on MLS one with a mortgage ($170k) and one free & clear($142k)and are beautiful houses. The third one is in a great area of town and a great rental property ($200’s) so would also be great for highest bidder sale. Thanks Jackie
I always make 2-3 offers and seller financing is one of them. If you offer $37k cash or $45k with seller financing and say you will split what ever you get as a down payment with him – there’s a 50/50 chance he will go for the seller finance offer.
the mortgage broker is only there if you are trying to sell to a buyer who will get a new loan. In that price range it may be very hard to find a buyer who can qualify for financing. You get paid the difference between your strike price and the price you sell for ( or you get paid a flat fee to release your option) – you are paid AT CLOSING.
Highest Bidder Sales are a lot of fun for everyone involved and they are very effective at getting a house sold.
let us know what happens
Jackie
Someone did offer her cash at $35 but she needed $45. And that’s when I came up with the HBS but I did put the strike price lower. Why I don’t know just in case I could only get $50 and the strike price at $45 wouldn’t give me much for all my effort. So I think this will be fun and I’ll let you know the outcome.
l’m trying to figure how one does a HBS with a house for example selling for $200,000 with a loan with my option fee @ $15,000. Is this shown on the HUD as an assignment fee and my fee will come from the mortgage lender????? Will they be pleased with such a large amount? You having completed 100 HBS’s what was your average price? Which worked better lower, middle or higher priced homes? I did have another call today and the owner had his house on the market for one year without any offer and it was a very attractive house inside and out. But they wont’ do owner financing and I just don’t know if it’s worth trying a HBS for a loan.
Thank you
My suggestion is to NOT to so focused on making a big profit ($15k) on these Highest Bidder Sales and instead focus on just DOING them so you get the experience. As you learn more and develop better marketing skills to bring in hundreds of buyers, your profit will go up. Don’t walk away from a deal because you can’t make $5k or $15k.
Highest bidder sales work good in all price ranges IF you are selling with seller financing and you have a good strike price and the seller is not demanding too much cash up front. Ideally you are either getting all the down payment OR splitting it with the seller and they have agreed that what ever you can get as a down payment will be “good enough”
Highest Bidder Sales work in all price ranges when selling to someone who will get a new loan. HOWEVER, you’ll have more success in the high median and luxury priced homes. More importantly, it will only work if you have a big enough equity in the property. Don’t expect that it will sell for retail prices. So that means your strike price needs to be at least 30% below market and 40% is even better.
I don’t think it’s a good idea to go after luxury homes until you have several successful highest bidder sales under your belt.
Wow, Jackie so I see where you arrive at the strike price to be $45k. Take 60% of 75k and get $45k. And yes I’m happy to learn how to do HBS on the lower end houses first .It will be awhile before I venture to the luxury ones. I will have fliers delivered throughout the area and big signs on the property’s front lawn. This house is on a relatively busy street so our bandit signs will work great. We will also list online with Craigslist, Backpage and several others. Thank you for all your help and I will be sure to let you know the outcome.
Jackie, I have another house to see on Saturday with a couple who listed the house for 1 year on MLS and no luck. The price is now down to $139,000 which looks about the place they should be. The house is paid off and they want to do the HBS. So your’re saying I take 60% of $139,000 and arrive at $83,400 and that is my strike price???? If the house sells for $140k and strike is 83,400 and we split $55,600 that’s $27,800. WOW I would settle right now for $10k until I am real good at these. Do I move the strike price up?
Thank you
Hi Jackie,
Just listened to the two hour video and am all set to go on my Highest Bidder Sale. Could I put the pictures on your website http://www.highestbiddersale.com???
Thank you
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