"It's just like a normal auction, except…

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…instead of the price going up over time, it goes down.” ~Bothell home owner

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48 thoughts on “"It's just like a normal auction, except…”

  2. I don’t see what’s so new about this. Sellers lower their prices all the time if they can’t get the price they asked for. This is just formalizing the process.

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  3. Jillayne: You’re so far ahead of the game! 😉

    And Sniglet: I agree. The process is not fundamentally different… But the marketing is… Hence the national exposure.

    And at the end of the day, marketing is critical to a listing, even if this type of marketing might be misplaced in this case (i.e. national marketing exposure isn’t likely to help him sell his home).

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  4. I posted somewhere that this is how I would want to sell a house.

    The part I like the most is you don’t have to negotiate. If someone comes in with an offer below your current asking you just tell them to wait a few weeks and hope someone else doesn’t want it for more.

    This is a standard Dutch auction. It has been used successfully for centuries.

    http://en.wikipedia.org/wiki/Dutch_auction

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  5. I fail to see why the media is promoting this guy. Must be a slow real estate news week. I’ve got to hand it to this guy for getting the attention, but what he’s doing (other than the media attention) isn’t new.

    Sellers reducing their ask price weekly isn’t a new gig.

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  7. The Seller states that he sets the price at x and will meet in the middle with the Buyer. To me it sounds like the did not price the home to sell to begin with…he priced it above “market”.

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  8. Thanks for the comments everyone, it’s really interesting to get people’s take on the idea. I’m the guy who is selling the house.

    I appreciate the fact the concept isn’t radically different and to be honest, I too am a bit surprised the idea has gotten so much media attention. Not that I mind of course.

    For what it’s worth, I’ll throw out a couple things rattling in my head:

    * How “out of the box” can an idea be without scaring away buyers? My goal wasn’t to get national media coverage so paradigm-shifting wasn’t on the priority list. Anything in that vein would probably have done more harm than good so I tried to stick with concepts we’re all familiar with – price reductions, email alerts, etc.

    * If you’re a local TV news producer and a web-only story becomes the most popular one on your website (that’s what they told me when they schedule the TV interview), would you send a crew out even if there are arguably more news-worthy stories out there? Of course that’s hard to answer but it’s worth mentioning my story followed one on a near-fatal car crash and a piece on a father who made it to the hospital just minutes after his son passed away, leaving him with no way to say goodbye. That’s a tough job to have, deciding what’s newsworthy and what’s not. As for CNN picking up the story, I’m as surprised as you.

    * On the topic of pricing the to sell, that’s a tough one. Obviously I’m not a Realtor or agent so I don’t have a lot of data at my disposal but I did use what I could get my hands on. In addition to Zillow’s “zestimate”, which everyone has an opinion on, they also offer some great data on previously sold homes you can turn into $/sq ft. numbers and plot them over time. I charted that data and actually priced the house just lower than the mean because it got me under the $500k threshold and I didn’t want to scare people away. I guess we’ll have to see what final selling price is to know how accurate I was.

    * For those without speakers, you can read about the idea at http://www.BothellCountdown.com (sorry for the obvious plug but the home page does explain the idea pretty well I think).

    Thanks again for the comments.

    Justin

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  9. Hi Justin,

    I think the value of starting at a market price (that you have determined) like you are is very interesting, and a good idea AS LONG as you get lots and lots of exposure.

    This means that you have to launch it on the market to as large a buyer pool as possible (listed on the mls nets you the largest possible exposure…baring the evening news!), making sure that plenty of buyers will come early on to see you house in person, AND that they know to watch the weekly price reductions (by signing up for your emails) so that when it’s a price they would pay, they make an offer ASAP, knowing that they may be competing with other buyers at that new price.

    You have very good online marketing and photos, and are offering to work with agents with buyers, so it’s just a matter of getting the widest exposure possible to find the buyer who will make the best offer.

    I think you are doing a very good job! I think the novelty of your idea, your pre-market preparation to get your property ready to compete on the market will get you some good results. However, I think that will while this will work for you, it’s probably due to the fact that you will have gotten much more exposure (as a novelty) than others who may do in the future.

    The fact that you are willing to let the public know that you will be dropping the price by a regular amount, on a schedule is the KEY thing on top of having made sure the property looks appealing. Even though sellers and their agents do price reductions on listings, no agent (that I know of) has gotten their sellers to market that they will be reducing the listing price by a regular amount on a weekly schedule…that’s your innovative edge!

    Good luck and keep us posted!

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  11. Zillow, in some area, is high. In others, low. In some, “spot on”. It is of value to identify those scenarios by comparing the comps to the Zillow value. Knowing which way Zillow is leaning in “this” neighborhood is of value.

    Say every home that sold, sold for 20% less than the Zestimate. When a seller puts “the Zillow Zesitmate” as the asking price, you will know it is likely too high and 10% under list price is not a “bargain” but paying too much.

    Zillow does not have to be “accurate” to be “of value” as one of the tools used to determine price.

    Same is true for an appraiser/appraiser. Every agent knows they will have more trouble getting a property to appraise if it is the best home in the area, than if it is the worst. If it is the worst…then all of the comps will be higher. If it is the best…then all of the comps will be lower.

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  12. Like Jillayne’s original comment…I almost, but didn’t, write a post when I got the email on this Bothell auction.

    Year’s ago, and like still to this day, many are dragged into overpaying and outbidding Foreclosures and other “auction” type properties, being fooled into thinking that they are all bargains. Often the true bargain is hiding quietly in the corner.

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  13. I wish you well, Justin.

    Have you considered expanding your pool of potential buyers by putting the house on the MLS? There are several local companies that do that for under $500. You have to provide your own copy, photos, links, etc., but sounds like you’ve already done all that. — denismurf

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  14. Thanks for the apprasial Deborah, I think you’re 100% spot on.

    Denismurf, the house actually hit the MLS yesterday (http://www.redfin.com/WA/Bothell/19833-95th-Ave-NE-98011/home/286667). Of course I’m running into a brick wall trying to get “Bothell Countdown” mentioned in the marketing comments so I’m not sure how people looking at the listing through the MLS will interpret the consistent price drops, but I’m not sure what can be done about that.

    Any ideas are welcome…

    Thanks,
    Justin

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  15. Hi Justin,

    I would get rid of “Pot. in-law apt.” at the end and say a bit more about weekly price reductions. No websites are allowed on the mls marketing remarks, so that’s why you can’t include yours, although the rule is to prevent an agents’ branding or marketing.

    Good luck and again keep us posted!

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  17. I’m not in the biz, Justin, so I don’t know how to work the MLS.

    However, I just took a quick look at crasigslist and didn’t spot your house there.

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  18. It’s strange how the zestimate on this property went up $71,500 in the last 30 days, while the trend for the neighborhood (98011) is down over the same time period.

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  20. For those of you that didn’t make it to Justin’s FAQ, he apparently contacted Zillow and they updated their estimate based on a 4 / 2.75 house vs. a 3 / 1.75 house (what KC records have for the house). I am curious what ‘proof’ Zillow requires to make these updates.

    Also, I noticed King County still has your house listed as a 3 bedroom 1.75 bath. When are you going to let them know about the discrepancy so they can get the property taxes corrected?

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  23. Ardell, I think the latter is true. The KC assessor total sq footage including basement is 2970, which is close to what Justin is listing (2995).

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  24. I think this technique could work well across a large number houses.

    Currently, people price their houses a bit high expecting lower offers and negotiation. In this case, the price reduction schedule is the negotiation. If I buyer wants to make an offer below the current price he can be told to wait a few weeks and hope someone else doesn’t want it for more.

    Wwhat is the average time an active buyer searches for a house? Different people will value different houses differently. The goal is the find the person who values your house the most because they are willing to pay the most. Being picky about finding the top buying increases the selling time. If he lowers the price every two weeks then he might just lower it to a point where it is possible to find the buyer at that price within two weeks. It doesn’t mean it wouldn’t have sold at the higher price in four weeks.

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