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If it Looks Like a Duck, Walks Like a Duck, and Quacks Like a Duck…

A recent piece on ABC's 20/20 featured homeowners who, after failing to sell their home using conventional methods, attempt to sell their home using what is touted as an innovative new method. The method, promoted by George Cappony, is called "Fast Action Home Sale." ABC must think this technique is a great new idea because they went to the effort of setting up a meeting between the homeowners and Mr. Cappony.

I missed seeing the segment, but I read the transcript for the piece, and the technique not only doesn't seem particularly innovative to me, it doesn't sound particularly affective. Mr. Cappony describes his technique as being "similar" to an auction. "Similar" to an auction does not make it innovative. Where is the innovation?

The auction part of the technique had promise. Auctions are an affective way of selling property. A Fast Action Home Sale is similar to an auction because:

The sale is held during an open house
The property will be sold to the highest bidder
There is a unstated minimum
The property owners reserve the right not to sell

The innovations in a Fast Action Home Sale are differences to the standard auction model that, as I see it, weaken the sale's effectiveness. A Fast Action Home Sale is different from an auction because:

Bidders do not pre-register
Bidders do not supply proof of ability to pay
Bidders do not make a pre-sale financial commitment
There is no auctioneer, the homeowner conducts proceedings
The homeowner takes all offers and considers them after the sale
The homeowner contacts bidders after the sale and urges them to up their offers

It seems from the transcript that the homeowners were surprised and disappointed when the techniques of Fast Action Home Sale failed to secure them an acceptable buyer. It doesn't surprise me though. If they wanted to try an auction, they should have tried a genuine auction. They should not have accepted the hype of a do-it-yourself version.

Link to ABC 20/20 transcript, "The Fast Action Home Sale."

http://abcnews.go.com/2020/story?id=3666566&page=1

Posted by Rosario Lewis, GRI ~ DDR Realty, Orange County, NY on 10/08/2007 01:31 PM

Comments (24)

2020, auction, fast action home sale

24 Comments on If it Looks Like a Duck, Walks Like a Duck, and Quacks Like a Duck…

OCT

2007

Rosario, Whhaat ??? Have an owner hold an " Open House " and take bids from people who have no commitment, no proven ability to close, etc ? And this was worthy of a news segment ? Hmmm...

Bill - Definitely scary.

Seems kinda funny to me ... They took away the ability to properly qualify a potential buyer and used that as their new "inovative" sales approach to attract more buyers. Better off holding a simple Open House.

I saw him promoting his book on tv a few months ago. Mr. Cappony is more interested in his book sales than anything else. Be glad you did not watch it Rosario, not many people will be silly enough to try it.

Rosario - The more I read the more I am convinced that you just can't do this stuff yourself. Selling a home is probably the single biggest financial transaction people will ever make... You just need a team of professionals in your corner.

Rosario,

In a hot market, maybe. In today's market, insanity!! I believe this guy is just trying to sell a book or two. I hope it doesn't take off. Can you imagine the nightmares?

OCT

2007

Rosario- I saw bits of the 20/20 piece. Yes they were disappoint but of course we were not surprised. I think they decided to rent the house out in the end.

A conventional auction have many built in controls and safeguards for the seller. This new method seems to lack many of them.

Never heard of this. Wonder what the poor homeowner's fee to the guy with the idea was. I have a friend who is an auctioneer and that works if done with proper marketing in advance. You are right that buyer prequalification prior to permission to bid is key. In the hot market, it also worked to hold an informal "auction" by advertising that the house would be shown Sat, Sun and Mon and offers taken until 5 p.m. on Tuesday. But those days are over.

Rosario, I love this post! Their experience sounds just like any Open House in any home in the country that is For Sale. Du-uh! At least an auctioneer know how to stir up interest and how to ensure that only qualified people will be bidding. But this isn't an auction really, just an ordinary old FSBO.

You are right. Do it yourself home selling techniques rarely work.

Thanks taking the time to read and comment on my post: The Way to Get There is to Know You've Already Arrived

OCT

2007

UMMM, YEAH! What did they expect to happen? Here is the problem with sellers wanting to save money, in the long run IT always COSTS THEM MORE.

Phyllis Pafumi

I just bought this book - I want to know if it would work in our market, which is going through a "price adjustment" when we didn't even have a bubble to adjust! I think I would like to give the book to my more maverick FSBOs who are never going to list anyway and see if it helps them.

OCT

2007

The fact of the matter is that the Auction method of marketing in many cases does the following:

In poor markets, increases the true market value of a property through the competitive bidding process - while agents and brokers do the same thing, they have to pre-qualify a person before they come to the table. When in actuality, when they have an auction, the people coming and registered in the auction are pre-qualified and ready to buy no questions asked. In a true marketplace, the buyers are aware and are bewared of what they are purchasing, and upon their inspection make the decision to purchase.

All UCC filings and Lein lookups are done prior, and the stake holders are well aware that the property will be auctioned and that they have the opportunity to say yes or no to the sale of the property. Many in real estate think that Bubba Joe pulls up to the front porch and auction the items right then and there. Not the case. An auctioneer, especially those who are licensed and are with state and national associations are required to perform due diligence and ethically throught the entire process.

Most of the costs are not bourne of the seller in real estate auctions. In many cases, the marketing of the auction and all costs are negotiated between the seller and the auctioneer who then ensure that all bases are covered in all of their selling needs. Not just haphazardly thrown together in order to just show that it was advertised.

If they are doing a "fast auction" of a house, no matter what, in states where there are licensing laws ALL records of auction are auditable. This means that Bidders DO have to pre-register, they DO have to supply their proof of ability to pay, they DO have to make a pre-sale financial commitment, and in many states if a homeowner does perform as an auctioneer, then those records as well are not only auditable from the auctioneer boards but the Realtor Boards.

While in many states you do not have to be a real estate broker or auctioneer, I have always heard that a man who represents himself in a court of law is representing a fool. That is why it is important to ensure that an experienced auctioneer is used to market the property rather than the fool.

Matt -You managed to verbalize benefits of a true auction, as compared to a do-it-yourself version, very well. Thank you. You should post this valuable information as a blog of your own.

DEC

2007

What are all of you afraid of? It's your fault the housing market is the way it is, now a individual gives help to people who want to sell their house and don't want to pay the reiculous 6 to 8 % for a service of. . . . . what is it you guys in the real estate industry actually do again?????????? I got my house sold in two months with the advice from George. Creating an event that had an auction style atmosphere in which i recieved dozens of offers, some legit , some not, however I got more traffic than a realtor ever woud have gotten for me. THATS RIGHT, I DIN'T HAVE TO GO TO SCHOOL FOR 2 WEEKS AND PASS A EXAM TO HAVE A LICENSE LIKE YOU SO CALLED PROFESSIONALS OUT THERE AND STILL GOT MY HOUSE SOLD. THIS WAS A LIFE SAVING EVENT FOR ME AND MY FAMILY. and think of all the money I saved. IT'S ENOUGH TO MAKE YOU SICK , ISN'T IT REALTORS.

P.S. HATE THE GAME

NOT THE PLAYERS.

Richard - Congratulations! I am very happy for you and your success.

Rosario, we attended an auction recently- the listing broker must have seen the episode. We wanted to see how it worked, but couldn't because we were the only people that showed up. The listing broker told us that he had spent in excess of 10k advertising it and another property for the event.

Oh- my point: it's a duck!

DEC

2007

Laurie - Attendance at auctions is hit or miss, just like at open houses. That's much too unpredictable for my comfort.

Rosario,

For a month I subscribed to the forum for the book. What an eye opener! The author sticks to his guns that this will always bring what the market is willing to pay if done correctly...the disappointed sellers walk away glumly, looking for their next alternative.

There are some very happy people there too, but you get the whole story on the forum.

Dawn -I have no doubt a do-it-yourself auction will work for some. I just don't think it should be promoted as infallible.

JAN

2008

Rosario, you and the other 1.1 million "realtors" out there just don't get it. Your traditional system is broken. Your real estate marketing cartel is designed to pass laws and regulations so anyone with a GED can be a self-proclaimed "professional". The entire basis of your sales system is that sellers are dumb and buyers are dumb and you need me (an agent) in the middle. Home sellers are tired of your high fees, poor service and attitude. Get used to it, more on the way. Most people buy and sell every 3 to 7 years, your commission of 7% or 6% or even 5% is a joke, because in most cases, your TRUE COMMISSION can be 40% or 50% or more of the seller's equity!!! Get off your high horse, get real, you're all going down. It's called America. It's called free enterprise. For sale by owners can have attorneys handle the whole transaction for a fraction of the costs you charge, seller know this, buyers know this. That is why today, 1 out of 3 homes sold in America do not involve an agent (true stats, not NAR generated hyperbol). Let's see who really wins down the road when property does not appreciate 3% - 5% per year or more..certainly not the traditional agent. Agents scare me.

JAN

2008

With all due respect to FSBO "KING", and please forgive the interjection, Rosario (I won't mind deletion), when I see the # of local FSBO'S that end up listing, I have to wonder about the accuracy of the info presented by the "king", and would be very interested to see the SOURCE of the stats- offering a link would make your point. Anger and resentment don't offer anything except you OWN bad attitude, and cloud a message that, if true, would be very valuable to consumers. Not providing statistics and the source is no better than the NAR's rose colored glasses (which, by the way, some real estate agents find as repulsive as you appear to). I'll look forward to the link that offers the FACTS- thank you in advance, FSBO KING.

JAN

2008

FSBO King - Thanks for the comment. I like to hear decenting opinions, and therefore I do not delete comments. I would, however, appreciate more information concerning your stats. P.S. - I don't believe any agent scares you.

Laurie -Relevant interjections are always welcome. Feel free!

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