HOUSTON—An entrepreneur in northwest Harris County is offering a 2,300-square-foot home for pennies on the dollar in an attempt to show that the penny auction idea is a legitimate vehicle for a profitable business and a way to get someone into the home of their dreams.
“We want to try to help people get back into homes, and build a sustainable model so we can continue to do it,” said Tommy Allen of PennyMansion.com.
Allen stood in the living room of the home located at 14511 Royal Mountain Drive. The four bedroom, two bath, single-story home was built in 2010 and sits on a cul de sac in the Eagles Landing subdivision near Kuykendahl and FM 1960.
“Best of all, it’s probably going to sell for less than a thousand bucks,” said Allen.
Allen said the online auction works by having potential buyers purchase penny bids. For approximately $180, buyers get a series of reports for the house (housing area report, green home energy report, inspection report and home valuation).
That gives each potential buyer approximately 36 penny bids when the online auction opens on June 23. Additional penny bids come with referring a friend or acquaintance to the auction.
While Allen predicts the home may sell for just a few hundred dollars his company hopes to recoup the cost of the house by getting about 800 people to pay the fees necessary to join the auction. The home has an estimated value of $131,000.
“Ultimately, the goal is one house per day,” said Allen of the business model he hopes proves successful. “And then I think of all the different people we could help.”
Allen said one of the biggest obstacles to that success is the public perception of penny auctions.
The Better Business Bureau in Houston has warned that online penny auctions, sometimes referred to as “entertainment retail bidding,” are a mix of legitimate and non-legitimate sites.
“Well I’m glad you brought that up,” said Allen. “That’s actually our biggest challenge today. We can talk all we want but I think it’s going to come down to showing folks that we’re serious about it.”
And he says the proceeds of the actual auction will go to charity.
More information on the home and the auction can be found at www.pennymansion.com