Read or watch The Secret:)
Note that in Brandon's scenerio, everyone involved was represented by a professional. No loose cannons allowed. That is where troubles begin.
Just as Brandon desciribed, I have been on both sides of this strategy. What I like about this is the tire kickers and the 'buying above their ability' buyers are shaken out of the mix quickly. The winners present a 'clean' offer. That, in essence, is what every seller is looking for.
Don't try this as a DIY project. One of those recent seminar graduates will be able to tie your property up and cost you no less than 60 days.
Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
Realistically, you should never list a property at a price that you won't accept. With that in mind, if you list at a price and don't get any offers above that price, that really is the market telling you that the house isn't worth more.
So, strategize with your agent, and agree on a strategy!
All the best,
I ran this type of listing for a client recently, to liquidate her major "fixer upper" property in an EXTREMELY desirable part of Bellingham, WA, known as Fairhaven. The way we protected against the scenario you describe above was to make it widely known that NO offers would be reviewed until the 6th day after the listing went live. We ended up with 12 written offers (6 others backed out in the last hour) and we sold for all cash, no contingencies, 10-day close, for about 25% above list price. It was very much "fair market value" in the end.
A few points that were driven home during that experience: Your listing agent should have a policy from the get-go that they will not represent or assist any buyers whatsoever. Every buyer will need to get their own buyer's agent and compete on equal terms with everyone else. I had at least 4 or 5 buyers come straight to me and ask for "favors" to get them the house.
Also, in retrospect I would've run it for 7 full days and looked at offers on the 8th day. A little more time would've likely netted the seller a little more money.
Next, we made it 110% clear to everyone that we were definitely going to pick an offer, so put your best foot forward from the start. Dot every i and cross every t, bring pre-approval letter or proof of funds with your offer, and don't hold back. Show us your cards, because there will be no second chances. Another way to approach it would be to say "We're going to pick the top 3 and give them all one chance to revise." As long as you're up front.
Finally, to get this sort of frenzy going we priced it at a ridiculous low number so it gained lots and lots of attention. Don't come on at 3% under fair market value and expect an auction like we had. I've seen other sellers do that, and it will backfire on you.
Best of luck!!!
There is more to this strategy than listing your place at the low end of market value. Before you do this, you need to fully understand the strategy, trust your agent and the process and be realistic as to what outcome you can expect. No strategy will get you more than your home is really worth. In most cases buyer's will need a loan and require an appraisal. The key to having a great outcome is realistic expectations and the right pro on your side.