I've sold the house at long last! We are closing on Monday. It has been a stressful process selling the house in this market. The final selling price is 14% below what I paid for it in June of 2005. That's sad, but such are the vicissitudes of capital investment. You can't buck the larger trends in the economy. I recall having a conversation with Ken about this at one point: a company can work so hard to improve its stock price, but the larger economic picture plays such a huge role, and in particular the availability of capital. Imagine a company as a sailboat with the best crew and the best equipment: the main factor determining how fast the boat goes is still the wind, entirely out of the crew's control.
A funny thing happened yesterday. I've been trying to sell the furniture very quickly, since we're closing on Monday. For a while, it wasn't clear that the sale would go through. The buyer runs a small business where she buys houses and turns them into foster homes. I'm not entirely sure how it works (I'll ask her when we're all sitting in the conference room at closing) but presumably she gives motivated foster parents a break on rent while collecting money from the state to pay the mortgages. She ran afoul of new formulae used by mortgage lenders because her name is on the mortgages for the 40 houses her business runs. We thus didn't know until the final week whether or not she would be able to find a willing lender.
That led to needing to unload the furniture at the last minute. (If the deal fell through, we wanted the furniture in the house to frame the rooms properly.) That's why I posted ads on Craigslist yesterday morning to sell off the furniture by today. The marquee item was the nine-piece living room set, including couch, loveseat, chair, and ottoman (in brown leather) along with coffee table, end tables, and two lamps. The loveseat also came damaged with cat scratches.
I probably paid between $1000 and $2000 for the set (all new) two years ago, but wanted to assure myself that it wouldn't go unsold and I'd have to haul it to the dump on Tuesday. I set the price at $400. I posted the ad at 7:40 a.m. yesterday. I had responses starting at 7:43 and continuing throughout the day. I was going to be at the old house in the evening, and I made appointments with people. I told everyone that multiple people were interested and that four or more would be showing up between 7 and 9 (the hours I said I'd be there). I apologized for not doing the usual procedure of making one appointment at a time, since I'd be screwed if that person didn't show up. I told people that I would sell the couch to the first person who gave me $400 in cash or transferred the money to my PayPal account. I was really hoping someone would take the latter option during the day. No one did.
When the time rolled around, six parties showed up right at 7 p.m. By this time, I had devised a plan to decide who would get the set if more than one party wanted it: I would hold an impromptu auction. As I was letting people into the house, I announced my intention. One of the parties was there to look at the desk I was selling, but the other five were interested in the living room set. As promised, I auctioned it off. "Anyone want to bid $450?" I started. Someone raised their hand. "Anyone for $500?" Another party agreed to that. Two parties got fed up with this system and left. I worked the first two parties against each other until the bidding reached $800 and the other party wouldn't go higher. They left in disgust. By that point, though, the fifth party (who had been on the phone contacting his wife) bid $850. That ended the bidding. I thought the whole thing was pretty funny.
For some reason that reminds me of the "auction" that I foisted on my two roommates (Brian and Mark) from my first year of graduate school. We had driven across the country together and arrived simultaneously at our three-bedroom apartment in scenic El Cerrito, California. Who was to get which room, though? One of the rooms was rather large and had its own bathroom. The other two would share a bathroom, and the smallest room was really rather tiny. I made up a game to fairly decide who should get what room and what everyone should pay. We held two silent auctions: a three-way auction for the largest room followed by a two-way auction for the second largest room. Our total rent was $1400. We all wrote down secretly the most we would pay for the largest room. I ended up winning that auction at $620. Brian and Mark then bid for the second largest room. Brian won that auction at $481. (It would make a better story if Mark had bid $480, but I don't think he did.) That left Mark paying the smallest amount at the bargain-basement rate of just $299. Brian and Mark spent the rest of graduate school thinking I was a rather odd duck (they probably think that to this day), but the goofy auction game had the beneficial side effect of leaving everyone thinking they had gotten a pretty good deal!
Here's a picture of me sitting Brian and his wife Minnie at a pub in England in 2004 (they were there working, I was visiting):
hey, I remember that picture. Giulietta took that one of us outside in the garden of the Cambridge Blue. It was raining, of course. It's funny, just a few weeks ago Brian was telling me the story of the bidding on the rooms. He said he thought it was a good idea!
ReplyDeleteIs there a reason you guys didn't divide the rent per sq ft in the bdrms, then throw in the master bathroom as arbitrary value depending on who values it? If 2-3 people wanted the same room, you could openly bid up to 49% between that and the next smallest room, with the remaining room at standard rent per sq ft. A 2way standoff under 49% could be resolved with a coin flip, with that room's rent at the bidded price, the next smallest room adjusted accordingly, and the smallest room at standard rent per sq ft. For a 3way standoff, bidding could continue past 50%, with the other two rooms scaled accordingly to remaining rent per sq ft. If all 3 absolutely had to have the largest room despite going past 50%, the high bidder A would be happy that he pays the lowest possible rent for the room. If B and C then both want the 2nd largest room at the bargain remaining rent, open bidding could go up to 49% between the remaining 2 rooms, with a standoff resolved with a coin toss. A, B, and C would then each pay their personal lowest possible rent, while still accounting for their roommates' preferences. No?
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