Frustrated with the unpredictable timing of the traditional luxury real estate sales process? Have a unique home that is difficult to value, and a limited buyer pool due to its rare amenities and high price point? Are you paying high carrying costs even though you no longer enjoy the property?
These problems are exactly what led me from traditional luxury real estate sales into the real estate auction industry. I wanted to help my clients take control of their situation. At Concierge Auctions, we place sellers back in the driver’s seat by allowing them to dictate the terms and timing of their sale. House auctions work, and there are many reasons why.
Auctions are a great way for smart sellers to liquidate assets in a timely and simplified manner — whether art, collectible cars, antiquities… or homes. At a luxury home auction all the details are taken care of. Your agent and the auction company expose the property to the widest range of potential buyers and aggregate bidders to compete. And after the auction, there are no contingencies. The sale closes quickly. You are not left with a long and drawn out closing period.
Traditional real estate sales pose challenges for sellers. Buyers are in control. The deal is not “done” when the property goes under contract, nor when the inspection period ends. Sellers can’t rest assured until the closing has funded. House auctions turn the tables around.
Unpredictable Timing: Don’t sit around waiting for the right buyer to show up. With luxury house auctions you set the date, qualified buyers gather to bid, and the highest bidder wins.
Years of Housing Supply in Most Markets: With traditional real estate sales, you are competing with every other luxury home on the market, and in many markets today the inventory levels remain very high. At an auction, your property is separated from the pack and placed under a spotlight as the best opportunity in the marketplace.
Buyer Trepidation: Buyers are often weary that they are overpaying for a property or that the property may lose value a few months after they buy. Remove this trepidation from the equation. With a house auction, buyers have confidence that they are paying a fair, market-driven price on auction day. Why? Because they are able to see other potential buyers as they bid, and the winner is only one bid above the next highest bidder.
Buyer Controls Timing and Terms: In a traditional sale the buyer controls the timing of the sale. Inspections and other due diligence can take weeks or months, even after a sale price is agreed upon. With a luxury real estate auction, the terms are set by the seller, and the sale on auction day is final.
Negotiated Sales Price: Tired of wasting time in the back and forth of a negotiation? Instead, set your opening bid, and let the market/bidders set the price. Following the auction, you can rest assured that the deal is done. The buyer had previously reviewed the auction contract, so all you need to do is move smoothly to the closing table.
Lower Net Present Value: The carrying costs for luxury real estate properties are typically very high. Even if you don’t have a mortgage, consider the taxes, homeowner’s association fees, property upkeep costs, staff, etc. If you accept the status-qou with the traditional brokerage process, then there is no guarantee when your property will sell. When it finally does, your profit will have been eaten away by the costs incurred in the meantime. With house auctions, you know your property will sell in 60 days, so you only have two months of carry costs. That means the net present value of your home could be higher if you choose the auction route.
What other issues have you come across with traditional sales? Leave us a comment. Or click below for more on how to sell luxury real estate.