Marketing A Pure Option

[JCannon 0]

Any strategy ideas on marketing a pure option? MLS listing? RE Agent help? FSBO Ads, signs etc.

 

Do we market pretty much the same as a L/O?

[Jonathan RexfordFL 8]

Auction. 14 day round robin auction. Use either websites or hold open house on a Weekend.

[JCannon 0]

Please elaborate on the round robin auction idea.

[Jonathan RexfordFL 8]

The way I do it is pretty straight forward. Once I decide on what type of auction that I am going to have such as a down payment or retail auction I market on those efforts. You mentioned that you have a PURE OPTION. I guess you are looking to retail.

 

I get the property ready for auction; Determine what the property needs and looks like. I order a property inspection, appraisal or comps if I cannot get an appraisal done.

 

The house needs to be ready to show. Since I have a website and I can conduct the auction on my site I can on most occasions start the bidding early.

 

But, in a nut shell I have the property ready for a auction in 14 days. I usually hold one open house so people can come and look and grab bidder packs and look over the inspection list. They write down there bid and when the open house is over that is when we work the phones. We start calling all bidders to work up the bids until we have one bidder left. The next day we meet the bidder to fill out contract. I coordinate with Mortgage Broker and Title Company and Seller and when all is over I collect a check.

 

Now I am leaving a lot out. Marketing is the big key. You need to give the home the biggest exposure. Flyers, Direct Mail, Signs, Ads, Signs, etc. We use a 800# to give information about the home and of course they can see on website.

 

But all in all if you did your job right you can get paid.

 

ROUND ROBIN:

 

I guess I left this part out a little.

Basically you are going to call all bidders. Call Lowest one first. and say Hi this is Jonathan Rexford from the open house for auction today. I am calling everyone who left a bid on the property to let them know what the best offer is. Currently the best offer is $______________ I see that your offer is $_____________ What would you like me to increase your offer to?______________

 

There is a book called 5-day auction method....I am not a fan of the book. Good on concept. Their have been people that have had good success with the book. But, not I.

 

From what I have looked at when my sales did not go through it seems to be 2 key factors.

 

Not enough people who show up....Its all in marketing.

 

People show up but know bids? House was not ready.

 

It takes a team to put on an event like this. Doing the down payment auction is a little easier because you are offering terms. But it still needs to be ready to show.

 

Hope this helps.

[Brian - L.V. 0]

But, in a nut shell I have the property ready for a auction in 14 days. I usually hold one open house so people can come and look and grab bidder packs and look over the inspection list. They write down there bid and when the open house is over that is when we work the phones. We start calling all bidders to work up the bids until we have one bidder left. The next day we meet the bidder to fill out contract. I coordinate with Mortgage Broker and Title Company and Seller and when all is over I collect a check.

 

What do you include in your bidder packs and inspection list? Do you require the bidders to show you anything like a pre-approval letter from their lender to make sure their bid is legit? When you get your winning bid and you get together with the bidder to fill out the contract, is it a purchase and sale contract with your name on it? Or do you then cordinate with the seller to cancel your option and to then close with the bidder for your cancelation fee?

 

Sorry for 21 questions. I really want to do an auction-style sale soon, but I don't want to jump in blind either. I appreciate any insights!

[Jonathan RexfordFL 8]

What do you include in your bidder packs and inspection list?

 

Property info sheet, Sellers Property disclosure statement, Comps on the property, a little info sheet about me and company, copy of sales contract, survey (if there is one) Application if needed for loan.

 

Do you require the bidders to show you anything like a pre-approval letter from their lender to make sure their bid is legit?

 

If we can. Basically when they register online I carbon copy info sheet and email it to mortgage broker so they can contact them to get the ball rolling if its a purchase price auction.

 

When you get your winning bid and you get together with the bidder to fill out the contract, is it a purchase and sale contract with your name on it?

 

It has the sellers name on the contract but its not signed yet by the seller.

 

Or do you then cordinate with the seller to cancel your option and to then close with the bidder for your cancelation fee?

 

We cancel the option agreement and I perfect the notice of option agreement that I had recorded.

 

Here is a check list for a double close deal.

 

1. Complete all necessary paperwork to secure Property to be Auctioned

2. Order signs

3. Schedule home inspection

4. Schedule appraisal

5. Begin any necessary repairs to house

6. Have home cleaned

7. Set up phone log, scripts and directions

8. Add property to website

9. Create flyers

10. Write ads and place them in paper

11. Put out signs and flyers

12. Line up persons to run Auction and review roles

13. Line up Title Agent or Closing Attorney

14. Know what to do if phone does not ring – stop auction or do more marketing.

15. Answer incoming phone calls, read from scripts, and log all incoming phone calls

16. Make copies of material for the sale (flyers, rules, sign-in sheet, bid sheets, appraisal, inspection report, termite inspection report, etc.)

17. Prepare house for open house/inspection – Lay out materials

18. Talk to everyone who enters home – Make sure everyone gets buyer’s packet of information

19. Have everyone sign guest book

20. Allow people to inspect house at own pace

21. Have people make a bid on the “Bid Sheet” with their name, number and bid

22. Have people join your buyers list – Enter data into website at a later time

23. Stop Open House Inspection on time

24. Call all Bidders at 7:00 PM _________ night – Read same information to all Bidders

25. Get all of the Winning Bidders relevant contact information

26. Give all information to your broker and review it with them if appropriate

27. After your mortgage broker gives your buyer the thumbs up, sign Purchase and Sale Agreement with Buyer

28. If you are buying the property you are auctioning with an Option – Notify Seller of Intent to Purchase or cancel the option

29. Sign Purchase and Sale Agreement with Seller & Buyer

30. Schedule Closing with your title agent and close on the sale of the property

31. Deposit your check

[Brian - L.V. 0]

Hi Jonathan. I just read Bill Effros' book and totally agree with you. It's good on concept, but I think it can be made a lot better. I have a couple of questions after reading the book, though.

 

Can/should you do a 14 day auction on a house that is still occupied? (I had a guy contact me that needs to sell and is willing to do so at a discount for a quick sale, but it still living in the house)

 

When you get an option on a property, how much do you reveal to the seller about your intentions with the property? Do you tell them that you're going to hold a 14 day auction and probably sell their home for thousands more than your option?

 

How do you arrange to do an open house with the seller? Do you just tell them that you need access to the house all day on these two weekends?

 

Is a 60 day option sufficient if the house doesn't need any work before selling?

[Jonathan RexfordFL 8]

Hi Jonathan. I just read Bill Effros' book and totally agree with you. It's good on concept, but I think it can be made a lot better. I have a couple of questions after reading the book, though.

 

Can/should you do a 14 day auction on a house that is still occupied? (I had a guy contact me that needs to sell and is willing to do so at a discount for a quick sale, but it still living in the house)

 

When you get an option on a property, how much do you reveal to the seller about your intentions with the property? Do you tell them that you're going to hold a 14 day auction and probably sell their home for thousands more than your option?

 

How do you arrange to do an open house with the seller? Do you just tell them that you need access to the house all day on these two weekends?

 

Is a 60 day option sufficient if the house doesn't need any work before selling?

<{POST_SNAPBACK}>

 

 

To me 14 days is a plus. If you start your marketing 14 days out you can cover 3 weekends in advertising.

 

I do not reveal much to the selller on marketing and price. Sure they see a low ball price but I just tell that is a marketing concept and that our agreement between the seller and I is what they will recieve.

 

I prefer 90 days. EVER HAVE A LOAN THAT DID NOT CLOSE?

[Craig 0]

Jonathan, I have been watching your auction post closely. It took a while before you got my ear. YOU GOT IT... I LIKE IT. You got a great system down for sure. I see this working in a area that is in a HOT market.

[Sold ! 0]

Thinking out Loud:

 

Let's say you buy a 90 day OPTION from a seller for $125K on a house that comps out at $200K.

 

Do you suppose you could Auction off that OPTION? Would home-buyers have any idea what you were doing/talking about?

 

Has anybody ever done this?

[Jonathan RexfordFL 8]

They would in my system. When someone registers I send them a FAQ sheet. About how the process works. They see the bidding rules online. If they go by the property they see the flyers and get information.

[Sold ! 0]

You ought to write a book.

[Jonathan RexfordFL 8]

I really do not think I could perfect the course that I have already.

[Sold ! 0]

That's why you should write about it !!

[Jonathan RexfordFL 8]

Rich,

 

I hope I am not breaking the board rules. But here is a real good course on Auctions. I use it.

 

http://www.louisbrown.com/productinfo.php?...tAUCTIONPROFITS