Michael Watts, a Houston-based real estate agent, has attached a baffling price tag to his house: $150.
But there’s a catch.
If you want to buy the home, you have to submit an essay describing why you want to live there, and you have to pay him $150 to review it, the Houston Chronicle reports. The $150 price tag is, in essence, an application fee.
If all goes as planned, Watts will sell his home for a pittance to the person he selects out of thousands of applicants.
“It’s unusual, but it’s not a raffle,” Watts told Inman. “We’re going to review all the offers and are not picking the new owner at random.”
The selling strategy isn’t groundbreaking. Plenty of homeowners have tried to offload their homes using “essay contests” with application fees.
But recent media coverage of Watts and a Maine innkeeper who’s using an essay contest to sell her inn has refocused attention on the strategy, sparking some debate around whether it’s good for sellers, buyers and real estate agents.
The Maine innkeeper currently holding an essay contest actually acquired the inn through a similar contest in 1993.
That inspired other sellers around the country to follow in her footsteps. But most, if not all, of those copycats generally failed to collect more money through application fees than they would have earned by selling the home conventionally, according to an article published in The Baltimore Sun in 1994.
Yet as Brian Rayl pointed out in the Facebook group “Raise the Bar in Real Estate,” that was “long before the term ‘viral’ was ever coined and places like Facebook and Twitter made things much, much easier (and much more cost effective) to advertise.”
Still, raking in more money in application fees than the value of a home is a tall order. And it would only seem to have a chance at working in markets with tight inventory.
Watts would need to collect thousands of application fees to bag $394,000, the market value of his home estimated by the Harris County Appraisal District.
He plans to refund all the offer fees if he chooses not to sell the home to an applicant.
Some real estate agents applauded Watts’ chutzpah on Raise the Bar in Real Estate, but one agent expressed concern that the selling tactic may discourage the use of buyer’s agents.
The strategy could pose legal challenges, others noted. It might also raise fair housing concerns if a seller selected a buyer based on their demographic background.
Watts is no rookie to real estate, though. He’s likely to have thought long and hard about potential pitfalls.
“It is an interesting perspective and it appears that all of the legal angles are covered at first glance (he states that the fee is nonrefundable and that he is a Realtor, etc.),” Rayl said.