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Im interested in the responses.

I could definitely see how this would benefit the consumer in a down market where you could bid below the list price. Closed bid.
 
Transparency will hurt the builder more than help.
What happens when people find out that 100 person wait list is BS? That 3 other buyers really aren't about to put a deposit on the same lot u want? That pricing adjusted for upgrades and lots really isnt going up?

In good or bad mkts, the builder makes a premium by creating a false sense of demand.
 
What about for less desired locations?  So they are not going to let buyers undercut the base price under this new plan.  This is what I did when I bought my last condo.  I offered what I thought it was worth which was below the asking price.

Cherry picking ones to sell for more may just annoy buyers.  One of the benefits of buying new construction are prices are generally set, well besides slight rises between phases.  But even with rising cost between phases, many times they are giving more options.  Bidding wars on used homes can be frustrating for the buyer.  This may cause some buyers to not wait on new construction because why wait 5 months to finally bid and get outbid.
 
You are taking away some of the big reasons why people buy new, they know the price, they don't have to give "best and final offers", once they sign, the lot/home is theirs, and they get to pick which lot/home is theirs if they are high enough on the "list".
 
Auction is not a guarantee for getting the highest price. It's offen the lowest price that the bargainers hold on to as a negotiation tactic. The inability to predict the outcome developers want a definite structured method of a financial model.
 
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