SEALED BID SALES
There are many situations where an auction is NOT the proper method of liquidation.
Look at a case in point. We recently liquidated a frozen pizza manufacturer in Dallas, Texas. This operation had very specialized bakery & refrigeration equipment. There were only a handful of companies in the country that had any interest in this type of equipment. If sold at an absolute auction, the lender and the liquidator would take the risk that:
Our sealed bid sale method eliminates this risk. We will be happy to develop a plan to market an operation upon request and will discuss the various details that go into our marketing efforts. The important items to know about our program at this point is:
SEALED BID SALES FOR REAL ESTATE
The Dobbins Company has had success marketing certain types of real property by sealed bid. Several years ago, we were approached by a lender who was fed up offering foreclosed real estate by auction. His reason for this was that an unsuccessful real estate auction, where the property did not meet the minimum bid, placed a value stigma on the property that could follow the property around for years.
Example: Your bank forecloses on a piece of real estate that has been appraised for $1,000,000 as a distressed/quick sale value. It is decided that the bank wants to liquidate this property ASAP and will offer it at auction with a reserve of $800,000. An auction company is engaged, a brochure is mailed and media ads are placed. Auction day arrives and everyone in the world who is interested in this property at this point in time is in attendance. The auctioneer begins the sale, the ring men fan out throughout the crowd, bids come fast & furious but the high bid sticks at $600,000 and the bid is rejected.
What has happened here?
Other than the property not selling, everyone who has any interest in this property has just witnessed the fact that the highest price this property would fetch at auction was $600,000. This becomes the defacto Fair Market Value of the property and this stigma could take years to overcome.
Our sealed bid program creates the competitive bidding atmosphere of an auction while giving the lender complete control and confidentiality over results. Give us a call and we will develop a plan tailored to the specific property.
WHAT ABOUT PROPERTIES WITH ENVIRONMENTAL PROBLEMS?
These type properties work especially well with a sealed bid program. Your bank may have a policy prohibiting the foreclosure of properties with environmental issues. What then? The Dobbins Company has had success selling mortgage notes by sealed bid. This gives the lender a liquidation option while keeping the bank out of the title chain. Give us a call and we can discuss your particular situation.
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