In 2011, the price of oil was high and the economy was very strong in Alberta. Times were good. There was a lot of luxury building going on and good luxury sales being made.
At that time, I was coming to a close on the construction of my own house in Calgary and my neighbor, whose house was not as luxurious as mine, sold for $4.2M before he could put the sign in the yard. Using my neighbor as a comp, we were excited. My feeling was, “I’ve hit a homerun. I’m going to make a million bucks on this house.”
After enjoying the house for a few years, we decided to put it on the market in January of 2014 for $3.3M. The price was a bit aspirational, but not ridiculously so. After all, we had spent over $2.7M building it. We were encouraged at the time to go that route, but in hindsight, it was a big mistake—one that would cost us.
We held out at that price for a year, which turned out to be the worst thing that we could have done because at the end of 2014, the price of oil tanked and the luxury market in Calgary evaporated overnight. We had 365 days on market at an aspirational price, and we were in trouble. We didn’t know it yet, but we were.
So, we did what many sellers do. We got frustrated with our agent. We had received no offers up to that point, and we’d had few showings. So, we fired our listing agent.
After hiring new listing agents, we went through our first price reduction of $300,000. We thought that a decent reduction of almost 10% would draw interest. Nothing happened.
Months went by and we dropped the price another $300,000. Still, nothing happened. No increase in showings. No offers.
A few more months passed. We had now been on the market for a year and a half. We dropped the price another $300,000. Nothing happened—and now panic started to set in.
In 2016, we crossed the second-year anniversary, and the market was continuing to deteriorate. You could just see it and feel it. The sale of luxury homes had pretty much disappeared and more and more product was coming on. We had already lowered the listing price by $900,000 and nothing had happened.
I went to my listing agents, Barb Richardson and Lisa Tomalin-Reeves of Sotheby’s International Realty Canada, and said, “We have to think of something else. I want this property sold in the next two months. What do we have to do?”
Their initial suggestion was to lower the price again. They thought that if we priced it below $2M we would capture a whole different audience. We were currently listed at $2.5M, and I had already reduced by nearly a million dollars and nothing had happened. I didn’t know if with another $500,000 something was going to happen. What if the price reduction was too much? How would I know?
At that point, I realized that I was just negotiating with myself, and I needed another plan.
Barb was aware of a property that Concierge Auctions had successfully auctioned in Priddis the year before. She had their contact information and asked if I wanted her to reach out to them. I said, “Yes, absolutely.”
In May of 2016, we met with Concierge Auctions, and I think we agreed upon the auction the day that we met. I was determined to sell. We put a Reserve on at $1.5M, and the property sold for $1.8M. By the end of July, we had money in the bank.
I thank Barb for introducing me to Concierge Auctions. The auction gave us what we wanted which was resolution. Since the sale, a lot of people ask me, “Do you feel like you got market value for the home?” A couple of things have happened since I auctioned my house that allow me to definitively say, yes.
In February of 2019, a little over two and a half years after the sale of our house, Concierge Auctions auctioned another house on the same street. It was on a superior lot to ours and sold for $1.8816M. Ours sold for $1.8M. This validated market price for properties on Granite Ridge.
The second thing that has happened, is that the house that I sold through auction is back on the market—and has been for about a year. The original list price was $1.950M, and although the price has been reduced to $1.925M, it has not sold.
A recent comp on the same street at about the same sale price, plus, my former house back on the market at a list price slightly higher than what I sold for with no results, have given me the confidence to be able to say to people, “Regardless of what price you receive, it is certainly top of market at that moment”.
After auctioning our house, I came to the realization quite quickly that I was not the only person in need of this service in Canada. Joining Concierge Auctions was actually my mother’s idea. She said, “You love architecture. You love great homes and luxury products. You have a lot of experience in real estate. Why don’t you do this?” And it just clicked for me. Soon afterward, in 2016, I launched our efforts in Canada and we have been growing exponentially there ever since.
I do not know of anyone else in this business with the same experience that I have. There is nothing like the credibility that exists when you can talk with a seller about your own experience with the process. Having signed the same documents that you are asking them to sign. Asking them to trust a process the same way you trusted a process.
Most sellers I have worked with have been in similar situations to mine. They have gone through price reductions and multiple listing agents and they have not been able to find the market. Sometimes it is because they were priced aspirationally, sometimes it is market-driven, and sometimes they are struggling to identify and reach the right pool of buyers.
I see the same issue play out in good markets and in tough markets. It’s almost irrelevant what the market on the whole is doing when you are selling something that is unique.
Auction lets you find out who your buyers are, find out where they see value, and then move quickly to a sale; versus what I was doing prior to auction, which was chasing the market down.
One of the things that I learned in my 20 years in commercial real estate was that if you are serious about selling and you know the market is continuing to fall, it is best to get underneath it and catch it. I don’t know of another option out there that allows you to catch a falling market faster than auction does.
In a buyer’s market, there is no need for buyers to act. They keep waiting because sellers keep lowering their prices. Price reductions create no sense of urgency, and sellers have no guidance on where the pricing needs to be in order to be successful. You are negotiating with yourself because there is nobody on the other side of the table to accept or reject the price change.
Everyone is going to achieve a different result, but in our case, I truly do not believe lowering our price by another $300,000 would have made a difference. By having the time-certain date of an auction, it caused four people to emerge and resulted in a sale. I don’t think another price reduction would have produced any buyers, let alone four of them.
Having a time-certain sale date is a critical part of the auction process and something that differentiates us from the traditional selling model completely. Because, if you like the home, you can afford the home, and you’re willing to compete for the home, there is a date you need to show up.
I recommend that sellers first list their properties for at least 60–90 days because the best-case scenario is that somebody will fall in love with your house and pay you what you are asking. But, if you are serious about selling and you get beyond 90 days, you need to be cautious. You need a strategy, and that strategy may involve auction.
Sellers and listing agents often ask me, “How much are you going to be able to sell my property for?” On day one of our auction exposure period, I don’t have an answer yet. But by day 30, I have a very, very good idea.
The fact that after just 30 days, we are able to provide the seller with a list of buyers and where the buyers see value, prior to them having to make a decision to sell, is so incredibly unique and is so powerful.
I can’t emphasize it enough. If you are in the market and you are serious about selling, this is a process you should be going through.