What the initial low price did was bring a lot of folks to the look at the
property. Created a huge gathering at the auction. However the question I
still have to ask is could they have achieved the same or better result by
sale through a normal mls sale.
They could have employed a similar strategy to bring people to the table, by
setting the price below market, to bring in more buyers and let the buyers
take the property to market price. We saw this strategy work very
effectively during the 2003-2006 time period. Now by "below market" I don't
mean a home selling for $600,000 being priced at $550,000 but rather
something more like $590,000 given all other conditions similar. The price
most be obvious that's it's at a discount.
Ex. A home has 3 recent comparables which sold for $600,000, $595,000 and
$603,000 but they all had dated kitchens and flooring.
cid:image001.png@01CC961F.E3D32540Your home has a new kitchen (with
craftsmanship and new flooring). By pricing at $600,000 you have already
indicated your value pricing, now the bidders will tell you how much they
value your taste in upgrades.
I've found that this strategy gets your home sold generally the 1st week it
comes to market.