Luxury Auction is becoming a buzz word within not only the real estate industry but also with both buyers and sellers of residential real estate. With that buzz, comes a need to dispel misconceptions relating to Luxury Auctions.
These kinds of auctions are hosted on behalf of the owner with aggressive marketing, buyer’s and seller’s agent involvement at their full commissions, and are not, a result of financial burden on behalf of the seller.
A Luxury Auction is not for every property and every seller. Properties that are best suited to this process include:
- One that has owners that want a time-certain sale, in a market where the housing inventory is high, and it may be otherwise difficult to stand out. Typically, the purchase is a 30-day, non-contingent sale.
- One that is unique in its design and appeals to a much smaller pool of buyers, and will benefit immensely from making certain that everyone whom may have an interest will be made aware of the offering. The budget spent on marketing, advertising, photography, video, 3D tours and VIP invite events is just shy of excessive and very effective.
- One that is tough to price and is at a disservice because there may not be other similar properties to compare it to. The vast market exposure produces buyers that offer their feedback on market value which assists the seller by naturally creating competition.
Due to the deadline sale date of the property, the auction process brings motivated sellers and real buyers. When asked for her thoughts about Luxury Auction, Brittany Hahn from the Auction Division at Pacific Sotheby’s International Realty said: “Both sides benefit from the fact that both sides are interested in a transaction. In the traditional sales approach buyers often question if the seller is actually going to sell or just testing the market.
Alternatively, sellers question if a given buyer’s offer that put them into escrow quickly could mean that they underpriced their property. And all too often, escrows fall out and the owner is forced to begin all over again.”
“Wouldn’t you prefer the certainty of a sale with a competitive field of bidders than an individual offer?” asked Anna Houssels of the Auction Division at Pacific Sotheby’s International Realty. Houssels added that the competition of an auction is a much more desirable scenario than sitting on the market and chasing the price down over years.
Predictability, liquidity and control are the three things that Luxury Auction offers that a traditional method of sale cannot. Getting the property sold in a quick period of time and avoiding the costs of carry can be beneficial for sellers that are interested in moving on. When maintenance, taxes, monthly expenses, etc. are factored in for a long period of time, there is no financial benefit.
A quick sale allows those involved to save the costs they would otherwise incur while the property sits on the market. Instead, why not reinvest the capital into another real estate opportunity, whether for your home or investment, or into the stock markets or other business opportunities. You can take control of the asset you currently have and maximize its return in a short period of time. Additionally, and equally important, is that properties that sit on the market for extended periods of time suffer from a stigma that there is something wrong with them.
Take a look at the Luxury Auction properties that are currently being showcased in San Diego and consider how beautifully they are presented and the large number of Open Homes making them convenient to view.