I suggest you read Bill Effros’s book, How to Sell Your House In 5 Days for a basic understanding of the process.
There are a few things I do a little differently that what is described in the book which I have found to be much more successful. Here goes:
1. Start advertising in the newspapers the Friday BEFORE the open house – approximately 7 days in advance.. Many potential buyers may not see your ad in the newspaper on the weekdays. If you only run the weekend of the sale, you might miss some buyers.
2. In your newspaper ad and all flyers, make sure to list the high value of the house vs your starting bid – which should be about 65-70% of market price. The low, low starting bid will get a lot of people in to look at the house. If you price it too high, you will not have a very good turn out. Example, Worth $180,000 – Bids Start at $120,000
3. Signs are the most important element of the sale. You can’t have too many – but you sure can have not enough. You need at least 25 – 30 signs up during the inspection period. They should start at major intersections and lead to the house. Drive the route to determine how many signs you’ll need. Most buyers come from signs. Attach balloons the day of the sale. Plan for extras on day two.
4. Have extra signs for the open house days. The city may take yours. Realtors have taken mine before. You need back up plenty of back up signs.
5. Put a LARGE sign in the yard the weekend before the sale that says the house will be sold to the highest bidder Sunday_____ ( the following weekend) Leave this sign up for at least 10 days – longer if possible – so as many people see it and tell their friends about it as possible. The bigger it is the better.
6. Get the house inspected by a professional inspector. Have copies of the inspection report available during the inspection period. You want your bidders to know everything about the property so they are not intimidated about submitting a bid.
7. If there are items on the inspection report which you have already fixed, make a note on the inspection report that it has been fixed. If there are items which you plan to fix, make a note on the inspection report. There may be items on the report which you do NOT plan to fix.
8. Ask yourself, is there anything on the report that would keep a buyer from buying? If the answer is yes to anything, then you need to get it fixed or at the very least, provide an allowance for the buyer to get it fixed after closing.
9. This builds trust. Important.
10. Besides the inspection report and the bidding rules, it’s a good idea so have information about taxes, schools, utilities and anything else you can find out about the house or the neighborhood. Make it seem like the best place to live in town, of course.
11. Have comps for the neighborhood available for everyone to see. Justify your advertised value price. Highlight the TOP sales prices.
12. Get a mortgage company you trust – who knows how to get creative – to be at the open house both days. They need to bring flyers with several different scenarios of down payments and loan programs. Zero down loans, 3% down, 5% down, 10% down and a few adjustable programs too. Remind the mortgage company that they will be getting a lot of leads for potential loans in addition to your buyer.
13. Ask the mortgage company to share the cost of the ads and signs since they will benefit from the buyer leads too.
14. Put chocolate chip cookies on a cookie sheet and keep WARM in the oven. The smell will make the house feel like a home.
15. Have napkins to put the cookies on. And SMALL plastic cups for water
16. Do NOT offer any drinks besides water. Young children may spill their drink.
17. Speaking of the house, the outside and inside need to be spotless.
18. Outside, have a large WELCOME mat by the front door along with flowers in pots. A wreath on the front door may be appropriate. Get the flowerbeds cleaned out, the yard mowed and all trees and shrubs trimmed to perfection. Check the backyard too. Get rid of any broken lawn furniture or other junk in the yard.
19. Inside, besides the chocolate chip cookies, think of places where you could put fresh flowers in vases ( kitchen, fireplace mantel, bathrooms, etc) Plan to have music playing REAL softly. Smooth jazz is good.
20. Anticipate that it could rain the day of or the day before the open house. If that happens, you need to beware of dirt and mud getting tracked into the house. Have mats at the front door and back door for people to wipe their feet on.
21. Keep a broom, dust pan, mop and paper towels at the house to clean up any messes.
22. Have plenty of chairs – lawn chairs work fine – in groups of 2/3 throughout the house so potential buyers can sit down and talk about it. You want them to feel comfortable and at home.
23. You want to house to be light and bright. Open all curtains as wide as they do. Pull mini blinds up as high as they go to let in plenty of light. Keep all lights on inside the house during the open house.
24. Try to get 2 – 3 people to be at the open house both days. You need someone to greet people and hand out flyers. You need someone to “close” the deal by getting them to bid. And you need a back up just in case you get busy. You may need someone to check signs.
25. Do NOT have a open house that last too long. You want to create a sense of urgency. Four hours each day is plenty. 11 – 2 is good. Perhaps earlier one day and later the next.
26. People will ask you if you really will sell it to the highest bidder. You need to be prepared with your response. Could be “if it meets our bid requirements, then yes, we will sell to the highest bidder”
27. Make sure everyone knows if they are not available for the round robin calling, they will be disqualified. You don’t want it to drag on for days and days while you try to track down a buyer. If they really want the house, they need to make themselves available. It will usually only take an hour or two. Establish a cut off time. 9 or 10 where you may have to resume calling the next day. But try to avoid this.
28. Do NOT be wishy washy. You need to stick to the rules and expect bidders to do the same. The best way to get a firm offer that closes quickly is for YOU to be firm with the rules too. Remember, you should not show your hand in poker and you don’t do it when selling a house either.
29. Use the www.HighestBidderSale web site. This will give your property a professional presentation.
Some other things to think about with highest bidder sales.
* You can do junker houses just as easy as pretty houses.
* You do NOT need to own the house. You could just have an option then do the highest bidder sale for a flat fee or a pre-agreed to profit over a certain sales price. Without a real estate license, you could get in trouble for charging a % of the sale. It could be construed as a commission. We don’t work for tips – remember that.
* You can do a highest bidder sale for rent, down payment for owner financing, option consideration or the sales price. But all bids need to be for the same thing so everyone is competing on a level playing field.
