Here’s One Man’s Way to Cut a Property’s Loss

GREENWICH, Conn. —  For anyone who has been carrying a hefty mortgage on property that greatly diminished in value during the real estate market dive, William Effros says he has a way that might help sellers cut their losses.

Effros, a computer consultant, has written a book, “How to Sell Your Home in 5 Days” (Workman Publishing, New York) that describes a method he says worked for him.

“I tell people if they just do this honestly, they will get the market price. You can’t fool the market,” said Effros.

Effros had bought a second home in Stamford, Conn., as rental investment property for $350,000. Months later, a real estate agent told him that he would be lucky to get $225,000 for the five-bedroom, three-bath home.

Effros took matters into his own hands. He wrote a newspaper ad describing the property, naming an asking price of $255,000 or “best offer.” He told callers there would be an open house over the weekend. No bids would be taken unless the buyer inspected the home. The home was to be sold to the highest bidder at the close of the inspection Sunday night.

The result exceeded his expectations. “I sold the house for $271,500,” he said.

Effros says this system works because it demonstrates the free market theory at its purest: The asking price is low but the sales price is driven higher by an unfettered market--the market being the buyers whose bids are listed on a sheet for all to see.

There is an escape clause, too. “The strength of the system is that it has a safety valve built in,” Effros said. “If you don’t get 25 calls by Friday night, cancel the open house you planned for Saturday and Sunday. You’ve taken no bids at that point; you have no obligation.”

Effros tells sellers to have their homes pre-inspected and surveyed and to have those reports on view at the open house.

When all of the bids are in, the seller then calls all of the bidders, beginning with the top bid and going down, giving bidders chances to raise their offers.

Of course, realty experts point out that there is no such thing as a “simple” sales transaction--especially in California, where real estate law is unusually complex.

Sellers who want to try Effros’ method might, as a safeguard, also want to hire either a licensed real estate agent or a lawyer--or both--for a flat fee to review purchase offers and shepherd the deal through escrow.