Fixed number to the list, or let the buyers bid it up over 48 hours

Question

Had a deal last month, small three bed in a working class pocket, contract at 92, comps supporting somewhere in the 150s with real work. I put it out at a fixed 104 and it was gone in about five hours. First buyer with proof of funds and a hard deposit took it.

The wholesaler who sourced it later asked me why I didn't run it as best offer by Friday. He had a point. Two other buyers came back that same afternoon and both said they'd have gone higher. Maybe 3 to 6 higher, on a 12 spread I split with him. That's real money.

My argument for fixed pricing is that it's the reason my top eight buyers answer the phone. They know if I say 104 it's 104, and they know if they move first they get it. The minute I turn every deal into an auction, the fast decisive buyer starts losing to the slow guy who nickels me on Friday afternoon, and the fast decisive buyer is my whole business. Speed is what I'm selling.

The counter is that I'm leaving fee on the table on every deal to protect a relationship that maybe doesn't need protecting, and the sourcing wholesaler is paying half of that discount without a vote.

Where do you land, and does it change above some deal size?

jordan_ellis2 · Answer

The one thing I'm fairly confident about after six months of reading is that auctions train buyers to wait. If every deal you send has a Friday deadline, nobody ever needs to answer you on Tuesday, and then your 72 hour advantage is gone because you built the delay in yourself. The 3 to 6 you left behind is the cost of the Tuesday phone call being real.

samantha_ruiz · Answer

I've done both and I'm splitting the difference now. Fixed price is the default. But if two buyers commit inside the same hour, I tell both of them exactly that, in writing, and ask for their best number by end of day with the deposit terms unchanged. Nobody has ever been annoyed by it because it only happens when the price was clearly too low, and it's not me manufacturing a wait. On the sourcing wholesaler question, flint, I'd get the pricing method into the joint venture agreement up front. If you set the number alone and he takes half the outcome, that argument shows up eventually on the one deal where you guessed low.

Fixed number to the list, or let the buyers bid it up over 48 hours

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