If you are selling your house for sale by owner, or FSBO, you may be considering a  “round robin” auction. That is where the seller advertises an unrealistically low price to create a flurry of interest, then holds an extended weekend-long open house. What the buyers don’t know is the seller’s “reserve price” can be anything the seller wants. The highest bid needs to exceed the reserve or else the seller won’t sell the house.

On Sunday night, the seller systematically calls the buyers asking for their highest bid. This goes round and round until all but one buyer has dropped out. Sort of sounds like poker, doesn’t it? And it is probably as big of a gamble.

I know real estate investors in some parts of the country who have been very successful at this. This is definitely not something I would recommend for a home selling novice.

I recently spoke with a woman who held one of these. Her reserve price was $300,000, but she advertised her house for $167,000 or best offer, as the “round robin” advice suggests. She was inundated with gawkers who thought she really was selling for $167,000. The people that showed up were actually angry with her. They expected a steal – they assumed it was a foreclosure! She called it a “total disaster”.

What do you think the chances of a qualified buyer wanting to pay a decent price showing up for an event like this are? Slim to none, I would say.  You will attract bargain seekers of all kinds.

I hope this gives you a new perspective in case  you are considering this as a strategy to sell your own house.