What is the first thing that comes to mind when you hear the word “auction”? Is it the $120 million record set for Van Gogh’s “The Scream” at last year’s Sotheby’s Impressionist & Modern Art sale? It is the tears that welled up when you missed that 1930 Stutz Monte Carlo… by one bid? Or, perhaps its the Napa wine trip you paid way too much for at your local hospital’s charity auction (Hey, at least it was for charity, right?).
To the majority of our clients, these are the memories they hold of prior auction successes and losses: buying and selling art, cars, jewelry and charity items. However, when considering bidding on real estate, much of the public pictures a distressed or foreclosure auction. At Concierge, we are changing that view — one auction at a time.
At Concierge, our luxury real estate auction clients are typically non-distressed owners of boutique luxury properties. They are savvy business people that want to control the timing of the sale of their luxury home. Rather than waiting on a buyer to come to them, they decide to choose the date and sell their property on their own terms.
Because our sellers are committed to the luxury auction process and to selling to the highest bidder on auction day, the majority of auctions held by Concierge are without reserve auctions. But in some cases putting a reserve on a luxury property before selling at auction makes sense.
Without Reserve Luxury Real Estate Auctions The truest form of a high-end real estate auction is without reserve, meaning the property will sell to the highest bidder on auction day. We encourage our clients to take this route when they are sincerely dedicated to achieving the highest market value today and moving on to other opportunities. A without reserve (sometimes dubbed “absolute”) auction ensures potential bidders that the seller is sufficiently motivated and that if they are interested they should become involved.
Sellers: Don’t fret. The thought that your house is going to sell to the highest bidder may at first be concerning. However, the fact is, if exposed appropriately to the right target markets, all interested buyers will be gathered at your luxury real estate auction, and your house will not sell for less that it’s worth. We identify capable, committed buyers and instill confidence in them to put their best foot forward throughout the bidding process. We ensure they know that if they don’t bid, they will surely miss out!
With Reserve Luxury Real Estate Auctions In some cases, after speaking with a luxury home seller, we may determine that a reserve is appropriate. If the reserve is set at an appropriate level to compel buyers to act — to generate competition from multiple bidders — then it may be suitable. On the other hand, if buyers aren’t excited about the reserve figure, or if the reserve is unpublished, then they may consider the auction a waste of time. In that case, you may substantially limit your bidder pool and in turn reduce your ability to achieve market value.
It’s not unusual to see reserve auctions associated with one-of-a-kind art. Christie’s may auction an early 1900s Picasso with a reserve price, because the owner is not willing to sell below that figure. A current example of one of our auctions is the 100+ acre Paumalu Ranch on the North Shore of Oahu, Hawaii, where large land tracts are extremely rare. This is the one and only time a property of this magnitude is going to sell to the highest bidder, so we agreed to place a reserve on the 45-acre parcel. (Note: The other 56 acres are selling Without Reserve.)
Both Without Reserve Auctions and With Reserve Auctions can be successful. The challenge is deciding which route is best based on the property and client circumstances. Speak with a Concierge Auctions Client Services representative to determine which method is right for you.
With or without reserve? How would you choose to sell your luxury home?
