In many locations across the United States, home auctions are becoming a more appealing option to home sellers of luxury real estate. These auctions are generally executed by high-end auction houses that specialize in specifically this type of home or property auction, in most cases the auction house looks to produce a non-contingent, cash sale to sellers that will settle within 30 days. These auction brokers perform a variety of tasks for the homeowner including but not limited too luxury real estate brokerage, auctions, advertising, marketing and public relations. The brokerage service covers all the legal and contractual services necessary to complete the actual real estate transaction as well as correspondence with all involved banks, organizing appraisals and inspections and other miscellaneous tasks.
The decision to take a home to auction often depends on the circumstances of the home or property and the seller. Generally auction is a good option for homes that are not easily valued; this can be for a number of reasons, location, current real estate market conditions, current economic climate and supply and demand. Auctions are also good for sellers who need to make a sale in a timely manner as the auction creates a deadline based on the timing of the sellers needs. The property is sold on the date of the auction assuming the minimum bid is met, and not when a buyer happens to submit an offer that may be subject to contingencies. Properties sold by auction are on the market for an average of 30 days, while homes sold traditionally are on the market for 190 days. Every month you have to keep the home is costly and a faster sale results in considerable financial savings.
Other benefits to an auction include the fact that the auction can be streamed online allowing you the property to be bid on by online users. Statistics have reported that online bidders win up to 29% of the time and these bidders can drive up the price of the home approximately 10%.
Another advantage of the auction process is that you only have to show the home once. The open house is usually the day of the auction. The traditional process requires the home owner to keep the presentable to be shown at all times and to be able to either vacate or allow potential buyers in the home with them that at any time. Over the course of months this can become very tedious, with just one scheduled showing this burden is completely relieved.
The auction process is also beneficial to the buyer, they can see in real time the bids other potential buyers are making on the property and adjust their bid accordingly. Buyers have been known to overpay when making sealed offers. People want to enjoy their real estate and not be held hostage by it. Buying on the day you’re ready, and selling on the day you select, makes sense for a growing number of sellers and buyers.
Many real estate companies are opening auction divisions with agents are attending auction school to learn how to sell a house in a new way. Or some agencies may partner with an auction house to present this service to their clients.
Just recently in our own market a 2.75-acre estate in Woody Creek that includes an over 5,100 square-foot residence, plus artist studio and impressive equestrian facilities has been set to go to auction. This auction is set to be held on September 4th and we can’t wait to see the results.