This episode exposes communication breakdown where the absolute auction contract was signed before discussing reserve price alternatives with the core business partner, who’d never heard of no-reserve auctions and immediately flagged worst-case insider-bid scenarios. The rushed decision-making process skipped critical AI research and auctioneer vetting that should have preceded commitment.
Key Takeaways:
- Minimum Bid ≠ Reserve Price Could have preserved absolute auction buyer urgency while setting $75K floor to prevent catastrophic loss—hybrid approach was never explored before signing.
- Partner Alignment Before Contracts Assuming shared auction knowledge created avoidable friction—30-minute discussion would have revealed reserve price preference and allowed unified strategy.
- Past Performance Data Is Mandatory Should have demanded auctioneer’s last 10-20 land auction results with county-verified prices before signing—transparency separates professionals from scammers.
- AI Research Comes First Immediately using LLM to explore auction structure alternatives before commitment would have surfaced minimum bid option and informed negotiation leverage.
Listen to the full episode for honest assessment of what rushed decision-making costs and how to build better pre-commitment research protocols.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital, vacant land funding partner. Talking about auctions again today. More updates. I know I was discussing the difficult property in Tennessee that we found out was previously listed twice recently. Was not moving
you know, close to the purchase price that we had it at that we’d never discovered. I went over that in previous podcasts and how we’re exploring doing, well, we signed up to do an absolute auction, where, know, there’s no reserve price, but it typically inspires, increased buyer activity. And so I went over some of that process in the previous podcast. but I was chatting with my core business partner.
Yesterday we had some misalignment misunderstanding just in terms of a strategy and approach. This was after I already signed the auction document and had already got the termination agreement signed by our existing broker who was listing on MLS. And so again, let this be a lesson.
that we are not perfect. We try to run things as smoothly as possible. It’s just we were trying to make a lot of decisions very quickly with the info that we had to try to solve this problem. admittedly in retrospect, before I signed the agreement, I should have been researching a bit more on possible other avenues or like adjustments to.
Uh in auction process because my partner’s been in he’s done a lot of auctions not land necessarily He’s like dude. There’s always floor. It’s always a reserve uh had never heard of an absolute auction before and it’s just you know, the The the risk of us, know potentially getting screwed on a really really low bid um You know if that was the case like that. It’s just a massive loss that we would have to eat or there was the risk of um
You know, it could be an insider job. Uh, you know, if the auctioneer running the process was not the most reputable, um, you know, he could, uh, you know, I’m just hypothetically saying this here and like, you know, eyes wide open, worst case scenario, kind of get his buddy involved, buy us out for really cheap exit price on the deal. And then they go and flip the property.
as a handshake deal later where you can take home more of profits. My partner operates in a lot of really difficult corporate restructuring and so forth. He’s seen that happen before. So his perspective on what is absolute worst case downside is helpful to keep in mind. At the same time, that would be a huge reputation risk for this auctioneer. And he’s not coming from some random place. He works for…
one of the largest brokerages in central Tennessee that routinely lists and sells like multi-each figure ranches and large estates and so forth, like a really, really polished group. And admittedly I should have gone to an LLM model and like really downloaded thoughts about the, and just looked for, what are alternatives? How do I inform myself better?
Talk about AI now all the time and I just I didn’t do that off the bat until I had already signed the doc But you know the AI was also pointing out. Hey, there like instead of just doing a reserve could you do a minimum bid process of You know still having the advantages of an absolute auction Meaning like a sale is going to be guaranteed so long as a certain threshold passes
within the bid process. you know, if we were realistic and even willing to, you know, eat a small loss on the deal, relatively small loss, you know, anything that would surpass that number, let’s say like 75K in this, in that auction process would then, you know, still be the absolute auction. So we’d still be guaranteed to sell and just make that publicly available. Whereas, you know, reserve auctions are
generally having a private reserve price. Plus I would have just wanted to know, okay, like what are some like the past data about the auctions? I’d ask for that. You know, is there any way to get any pre-bid activity like investors that you routinely share auctions with? Can we get an idea on what numbers they would put in? Like I should have just been asking some of these questions before. lesson learned, especially in a new area, something that we’ve never done before. I just rushed it.
so that was our back and forth process. went back to the auctioneer with all of this and, know, we chatted this morning. It’s like, we, we, we signed the contract. You’re asking to change the terms. And I’m like, I know it’s loose. Like we’re, ignorant here. We’re naive. Admittedly, we’re just really concerned. We’re going to get screwed on the steel. And so I brought up all these things like, well, I mean, legally, ethically, I just can’t view, you know, at least in within Tennessee law.
you know, doing this minimum bid process, like if it’s labeled absolute auction, like it has to sell if there’s a certain bid in place. like that, that’s what we are agreed on. He’s like, yeah, I can get you to try to get you minimum bids. or, know, pre bids from his investors groups. you know, I think I can get you at least 50 K like right off the bat. you know, which would be like over half of what we needed.
And just like really trying to push it towards out of state buyers who will see such cheap price per acre and just want to jump on that, even though it’s like not the most sexy land. And I really, you know, grilled them on, okay, what’s your exact amount of dollars being spent on advertising? It’s like 3,500 bucks plus a lot of local signage going up. And then they have, you know, the highest signature land.com, land watch, et cetera.
slots on those sites and they always prioritize their option properties as number one. So we’re to be front and center there. have outstanding drone photographer that they’re it’s like best time of year to take better drone photos. And I looked at all their site again, their brokerage is very, very solid. so we’re going to get improved photos there. and then, you know, I quickly, you know, again, credit to their team. They’re very responsive. They got back to me with,
some of their past auctions they did, all the land ones, including ones within like the last couple of weeks, and saw all of the confirmed county official records pricing on it. And some of these were pretty inferior properties, like comparably rough, like the one that the one that we have. And we would have to be by far the worst performer out of all of these auctions.
That that went on within the area like we’d have to be like You know twice as bad as the app the other worst performers so like that was more reassuring that okay These guys are getting real action on on their auctions here And you know kind of reassuring us, you know that
there’s a better chance for us to get a favorable result just based on performance of relatively similar assets. Some of them were higher quality, some were pretty rough and still got like very favorable results. So we don’t need much from a per acre perspective to at least break even with this asset. So that was really the key thing here. Plus the bids are gonna be publicly available in terms of what’s showing up on the website. So we have transparency there assisting us.
But yeah, again, in retrospect, I still, even with all this in mind, like instinctually, I think this is still the best pathway for us to mitigate the damage from this property as much as possible. We also went over, you know, our DDQ due diligence questionnaire on what we could have improved.
And why we wouldn’t have pursued this property in the first place. Again, if we knew about the listing history, we just would have been off the table. But even if that wasn’t the case, there were other key warning signs that we just wouldn’t have done. So again, our process, we’re always learning. always improving every single month, every single deal. We can always get better and, you know, just staying in the game and solving, solving problems, putting out fires as they come up. This is like my number one fire to solve at the moment. That’s why I’ve been talking about it so often here.
But, you know, again, we could have considered like, you know, our last list price was 190. And even though the previously previous listings wasn’t even selling for 100 K, it was like, you know, we’ve only been on market for 60 days. Like, should we just have tried dropping the price by like 100 K test it for another month, see if we could have found a buyer. And.
You know, try to mitigate the damage compared to like an absolute catastrophic scenario of just getting pennies on the dollar from an auction. But it was like, you know, it’s too late. We already signed the termination agreement. We’ve already signed this other doc. So. Again, we kind of rushed that process, could have had better comms, but that’s also something I would have considered in hindsight. But again, even if that, like if we lowered by a hundred K.
and accounting for commission. even if we, you we probably wouldn’t have sold that list price if I were to guess, just based on the previous listings that went on, like that could have easily been, you know, 20, 25K boss. If we, you know, we’re gonna consider another possible deal on the active listing, but then yeah, we could have considered doing the auction process after that.
is as well. And so that was kind of the thought. But, know, we just jumped on the auction instead, which again, looking at these other results, I’m still thinking we’re going to get a better result compared to even if we had listed. But it probably would have been more prudent to test a much lower price. Initially, we wouldn’t have been forced to accept anything listing the property for anything that came up.
And then, know, it’s always tough with the macro economy. It’s like, you do I want to fit this auction in before, you know, the possible reciprocal tariffs come back up in early July, but who knows what’s going on with that. So you really can’t time it for macro. so, you know, that, that was kind of an internal debate as well, but nevertheless, we’re here. We signed the doc. We’re going to be live with the auction on May 22nd.
but I wanted to share a lot more thoughts on how I would have handled the process differently. If I would have just stepped back for a moment and really thought things more through and chatting with my partner a bit more, we probably would have changed our timing and strategy a bit on this, but here we are crossing fingers at this point because we are locked and loaded.
I will let you all know how it goes. that, SeriousLand.Capital for any of your funding needs. We’ve had so many more deals coming in. I’m just trying to get more capital in because there are some very solid deals I would like to take a part of. So hope to see more from you all too. And then, Land Daily Diligence Facebook group for zero cost review of your land deals and LandPricer.ai for the most simple and accurate way to price land.
Continuing our grind on that subscribe and share talk to you tomorrow. Bye
