Thinking of selling house via bidding

[Fermion]

I have been talking with a real estate agent and a general contractor about what needs to be done to our house to get it ready to sell. I haven't signed anything and we have started thinking about just putting the house up for bids instead of doing a lot of work on it. We live on a river with a gorgeous back yard but the house itself (4000+ sq ft) needs some remodeling, deck and possibly roof work (no leaks but facia boards need replacing at minimum). We are ready to get rolling in our RV, having just finished building it. I know some of you have gone the bidding route with your parents or other relatives houses that you needed to sell. I am curious how one might go about this and what the process is like. Do you use an agent or DIY? Backyard:

[utrecht]

I have no answer to your question but Im curious so Ill be watching the thread. I had to say that thats one amazing view!

[W2R]

I agree, what a great view!!! And what a great backyard, especially for fishing.

By "putting the house up for bids", do you mean auctioning it off? I have never sold a house at an auction, but I would suspect that you would get much less for it than if selling the conventional way. At least, that is what appears to be the case around here, although I have no idea as to the condition of these houses.

On the other hand, you would avoid much of the stress of selling a home because you wouldn't have to do the repairs and fixing up, or waiting, or anything, really.

So, it seems to me that the decision involves how much the lessening of stress is worth to you. I would guess that your real estate agent could guide you as far as finding out who auctions homes and how to go about it.

[samclem]

Quote:

Originally Posted by Fermion I am curious how one might go about this and what the process is like. Do you use an agent or DIY?

I've been down this road, did it as a DIY effort. I used this book as a guide ("Sell Your House in 5 Days"). I got lots of action, and bids that exceeded my expectations. The process outlined in the book worked for me: Set a low "minimum" price to generate interest, advertise heavily for a week, let people come by and leave bids (even if it is just a dollar), and on Sunday night do a round-robin telephone bidding process. The problem was discovered when I went with the winning bidder to get the loan process started--they had terrible credit. So did most of the top bidders. This was the flaw. But, the whole thing had a silver lining: I ended up selling the house to someone who had seen it (with a real estate agent) and left a bid. I got a good price, their agent handled the sale with a reduced commission, and I only had to show the house for 5 days.
So, if you go with an auction of some type, my advice would be to have some way to pre-screen bidders in some way.

[utrecht]

Can you have a reserve? Or are you obligated to sell at the highest bid?

[Fermion]

Thanks. Yes the fishing is great, one of the best salmon/steelhead locations in the Pacific NW (except this year we have no water in any rivers). A few of you may have seen the RV we built ourselves. We had big plans to do a lot of work on the house but tempus fugit and all that. I decided to see what a general contractor would say and he started ticking off things he would do to get it in a good, salable condition. I started seeing our bank account tick down like clockwork and remembered the VHS tape I just threw away starring Tom Hanks called "The Money Pit". If we are only talking about leaving $25k to $50k on the table by selling the house in a couple of weeks via sealed bid, I think I would be ok with that. Especially if we did not have to sink a dime into it before the auction. I really want us to be in Florida with the RV by December. Our little sailboat has never tasted the Atlantic. Do you think it is necessary to even use an agent for something like this? I wish I could find the thread where one of you sold your mother's house in this fashion and pick your brain on how you set it up...

[kcowan]

We sold a house that way. We used a realtor because she knew the market and which other realtors to invite. Open house on Saturday, invited bids on Tuesday, house sold on Thursday. It was in town and had no view.

[W2R]

Quote:

Originally Posted by Fermion I decided to see what a general contractor would say and he started ticking off things he would do to get it in a good, salable condition. I started seeing our bank account tick down like clockwork and remembered the VHS tape I just threw away starring Tom Hanks called "The Money Pit".

I can relate to that, for sure!

Just a thought about repairs - - - I sold my house in July and planned to do all sorts of repairs first, but my real estate agent pushed me to put it on the market immediately and do the repairs while it was in escrow. Surprisingly, it was under contract in less than a week so I didn't do any of the repairs I had in mind.

Much to my surprise, the very lengthy "laundry list" of repairs the buyer required, cost me very little although they were a huge PITA to get done on a short timeline. Most of them were silly, trivial things and none of the repairs I previously thought necessary were on the list.

Instead of repairing it, before selling I moved out so it was empty and appeared spacious, and I had it professionally cleaned for $200. The buyer's wife "fell in love with it".

[rodi]

I have friends who sold 2 houses that way in the 90's - using the book mentioned in samclem's post. They tried on a third house (as part of clearing an estate) a few years ago. It didn't work. Despite heavy advertising and a low minimum bid - they couldn't get any serious offers. Ended up with a realtor.

I think one of the issues is the "HGTV effect". New buyers want everything fixed and shiny these days... That was less so prior to HGTV.

[Fermion]

Quote:

Originally Posted by rodi I have friends who sold 2 houses that way in the 90's - using the book mentioned in samclem's post. They tried on a third house (as part of clearing an estate) a few years ago. It didn't work. Despite heavy advertising and a low minimum bid - they couldn't get any serious offers. Ended up with a realtor. I think one of the issues is the "HGTV effect". New buyers want everything fixed and shiny these days... That was less so prior to HGTV.

Yes, I am afraid of that (that new buyers want everything fixed). I am ok with that as long as the new buyers will pay what it cost me to make everything new and shiny. I am not convinced they will. If you had a house you wanted $250,000 from after all is said and done, and you spend $100,000 getting it new and shiny, you need to sell it for nearly $400,000 to cover the $100,000 + sales tax on that ($10,000) plus real estate fee on the $150,000 price increase ($9,000) plus about $2000 more in state excise tax. $250,000 might be doable by some buyers who can't swing $400,000. $400,000 might price your house out of the local market. (This house won't be fixed up for just $5,000 if some of you are thinking that)

[Marketwatcher]

I'm thinking of doing something like this with my house. My neighborhood is hot right now, with lots of teardown activity. I'll be selling mine as is for land value. Fortunately, one of the developers in the area lives right next to me and is on his third teardown on the street. I plan to do this with just a real estate lawyer and an appraiser.

[Fermion]

I think our house rates above a teardown for sure, but one of the big issues is the concrete tile roof. It is about 30 years old now and there is some damage around the edge boards (but no leaks on the main roof that I know about). It is a heavy type of roof and because of the age, I am afraid to walk on it (don't want to damage tiles). This makes cleaning the NW moss off of it very hard. The contractor we had out Saturday was talking ballpark of $30,000 to replace the roof with asphalt shingles (it is a VERY large house) and maybe a few more dollars to fix the facia boards and repair the ends of any joists that may be moisture damaged.

So I mean, just started off there I would be down $30,000. That only addresses one aspect of the house.

[urn2bfree]

Quote:

Originally Posted by Fermion ?..If you had a house you wanted $250,000 from after all is said and done, and you spend $100,000 getting it new and shiny, you need to sell it for nearly $400,000 to cover the $100,000 + sales tax on that ($10,000) plus real estate fee on the $150,000 price increase ($9,000) plus about $2000 more in state excise tax. $250,000 might be doable by some buyers who can't swing $400,000. $400,000 might price your house out of the local market. (This house won't be fixed up for just $5,000 if some of you are thinking that)

And this is the perfect illustration of why the real estate compensation by commission as a % of sale price is ludicrous. You fix the house up. Now you have to pay the realtor MORE money for taking an action that costs YOU more and not only costs the realtor nothing but it makes the realtor have an EASIER time selling the house!!



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[rodi]

I would go the path that W2R did - don't do any repairs till they are negotiated, after an accepted offer and inspection. Who knows - they might not mention the roof.

Get a realtor that doesn't emphasize making you do all the cosmetic stuff.

My DH is getting ready to sell his mother's house. The first realtor insisted it needed paint/carpet/etc... She was interested in a quick sale with little effort on her part. 2 other realtors, instead, emphasized the fact that the school district boundaries had just been redrawn adding a big bump in value since it's now in the best school area. Be careful and interview several realtors if you go that route.

[kimcdougc]

Quote:

Originally Posted by Fermion I have been talking with a real estate agent and a general contractor about what needs to be done to our house to get it ready to sell. I haven't signed anything and we have started thinking about just putting the house up for bids instead of doing a lot of work on it. We live on a river with a gorgeous back yard but the house itself (4000+ sq ft) needs some remodeling, deck and possibly roof work (no leaks but facia boards need replacing at minimum). We are ready to get rolling in our RV, having just finished building it. I know some of you have gone the bidding route with your parents or other relatives houses that you needed to sell. I am curious how one might go about this and what the process is like. Do you use an agent or DIY? Backyard:

We also live in the Seattle area. We have found that in this area people are reluctant to purchase a home that is not listed with a realtor. They also like "move in ready". We are currently getting our home ready to list in the spring. Labor is free "us" so shouldn't cost that much to finish what we need to do and we will get our $ back when we sell. Working with a realtor who is taking a cut since she will list the house and help with the purchase of the new home. Just my 2 cents. Good luck with whatever you decide to do.

[Dog]

Hmmm....interesting thread. We have our main home that we plan to sell next Spring when DH retires (north of Seattle). The house needs work as we have focused all out time and energy in the retirement home on a nearby island.
Mostly cosmetic stuff; outside & inside paint, update fixtures, thorough cleaning and some yard work.
However, it is a 1958 home and I'm wondering about the inspection process and what it may turn up?
Not an open concept design, so guessing someone may want to remodel? Possible it could have water views with some tress removed.
Houses in our area have moved quickly this spring/summer. We are in a good school district, close to Boeing, transportation, the sound and can walk to "old town" with restaurants and shops.
We just aren't sure how much time, energy and $ to invest to sell it.
I'll watch this thread with interest!



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[akck]

Quote:

Originally Posted by Dog Hmmm....interesting thread. We have our main home that we plan to sell next Spring when DH retires (north of Seattle). The house needs work as we have focused all out time and energy in the retirement home on a nearby island. Mostly cosmetic stuff; outside & inside paint, update fixtures, thorough cleaning and some yard work. However, it is a 1958 home and I'm wondering about the inspection process and what it may turn up? Not an open concept design, so guessing someone may want to remodel? Possible it could have water views with some tress removed. Houses in our area have moved quickly this spring/summer. We are in a good school district, close to Boeing, transportation, the sound and can walk to "old town" with restaurants and shops. We just aren't sure how much time, energy and $ to invest to sell it. I'll watch this thread with interest! Sent from my iPhone using Early Retirement Forum

You might consider removing the trees. A water view home will have greater value. If you can increase the size of windows facing the water view would be the next thing to enhance value, as long as they're not too costly. As to an inspection, figure the condition of the roof, attic insulation, electrical, plumbing and heating systems. Those are easy to check and point out deficiencies and if they're nearing their end of life. Depending on if you have a basement or crawl space will show other potential problems. A 1958 house could have mainly ungrounded outlets, even though your outlets can accept grounded plugs. As to whether you'll need to fix anything is negotiable.


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[Fermion]

There is a world of difference being in the city of Seattle and being in the rural area around greater Seattle. Our house really has not increased in value at all since 2001 while a house in Seattle proper has gone up 150%. Kind of like the stock market. We bought a Microsoft house while everyone else seems to have purchased an Apple house.

[Live And Learn]

Quote:

Originally Posted by rodi I would go the path that W2R did - don't do any repairs till they are negotiated, after an accepted offer and inspection. Who knows - they might not mention the roof. Get a realtor that doesn't emphasize making you do all the cosmetic stuff. My DH is getting ready to sell his mother's house. The first realtor insisted it needed paint/carpet/etc... She was interested in a quick sale with little effort on her part. 2 other realtors, instead, emphasized the fact that the school district boundaries had just been redrawn adding a big bump in value since it's now in the best school area. Be careful and interview several realtors if you go that route.

+1

I thought the house I sold two years ago would need $10k of work excluding the dock which needed significant repair. The buyers inspector came up with $2k of stuff. We were very careful to state the house was "as is" in the ad. We got out full asking price (less $500 for the stuff their inspector found) after 9 days on the market.

The house we purchased was also listed "as is" and the ad specifically stated that the roof was end of life. But we fell in love with the water view. We paid full asking price which on a square foot basis was not marked down for the fact that the roof needed immediate replacement and the carpets were shot.

You'd be surprised how much a water view is worth.

[Sunset]

Clean it, wash the windows, paint the walls & ceilings if needed, fix the leaky taps and running toilets and list it with a realtor.

Your buyer will come up with a list of stuff to fix as negotiating move, you can offer to reduce the price instead.

Even if you spent 60K fixing it up, a buyer will still come up with a list of stuff to "fix".
They will all repaint the walls as well.