Auctions Gain Popularity for Sale of Luxury Property

In the not-so-distant past, real estate auctions were thought to be reserved for foreclosures and distressed properties, but these days, auctions have a taken a turn to the luxurious as more and more high-value properties are being offered to the public via auction. Celebrities, CEOs, and entrepreneurs have discovered auctions as a viable alternative to the waiting game that goes hand-in-hand with traditional real estate transactions. With an auction, the sale is expedited, and the whole process is transparent for both buyers and sellers.

There are two types of auctions for residential and commercial properties: reserve or no reserve, sometimes called an absolute auction. In the former, the seller can reject any bids he feels are too low; in the latter, whatever price is the winning bid stands.

Luxury auctions attract both sellers and buyers due to their transparency. The auction will achieve the true Market Value on auction day, no one feels as if they are bidding too high or too low; everyone is on an equal playing field. Because of that, the price of properties offered at auctions continues to climb. While it has become common to auction a luxury home valued in the low millions, $10 million and $20 million—or higher—properties are finding an audience here as well.

According to a recent article on Bloomberg’s website, luxury auctions are gaining steam among the wealthy as they attempt to sell their mansions. After sitting in the real estate market and dropping their asking price, owners find themselves turning to the alternative: selling at auction. But you don’t need to try the traditional route first. More and more sellers are listing their home for auction initially. And savvy buyers know that auctions are one of the best places to find a fantastic luxury property—often at a great deal—while avoiding the long, drawn-out process so often associated with traditional methods.

If you’d like to learn more about selling or buying a luxury property through a no-reserve auction, contact us today! or call 866-929-2243. 

Absolute Auctions Combat Falling Home Prices

Have you heard of LuAnn Lavine? If you don’t remember her name, you may remember her actions. On August 17, she had the opportunity to ask President Obama a question during one of his “town meeting” stops in Atkinson, Ill. And she asked a doozy. Lavine, a real estate agent and owner of Re/Max Hometown Advantage, was curious what the president has in mind to help the millions of Americans who are upside down on their homes.

“I own a local real estate company here in Henry County, in Geneseo, so you know where I’m headed: housing,” started Lavine. “Every week, I sit at the kitchen tables of families who are here today, and I listen to stories of lost jobs, being upside down in their house, asking for help, (asking) what programs are out there,” Lavine continued in the lead-up to her question.

Lavine went on, sharing how busy she had been in May and June, and how that spike led her to believe the economy was on the mend. But that’s not what happened. Instead, the debacle about the debt ceiling became the hot topic of discussion. “The phone has stopped. We have no consumer confidence. Interest rates are at a record low,” shared Lavine. Then the zinger: “What are your plans to get the country out of where we are?”

As Obama began to explain how the government is pushing lenders to provide loan-modification programs, Lavine interrupted—and that’s likely what has drawn the most attention.

“The loan-modification system has been a nightmare,” she said. “Short sales are a nightmare and the lenders are so tight and you have to be so perfect, and it’s not a perfect world.”

While President Obama acknowledged that there are significant challenges, he said the bottom has been reached and there’s nowhere to go but up. However, it could take this year and next before home values start to appreciate.

Because the market is slow to recover, home prices are not going to bounce back overnight, and they may never be as high as they were before the crisis. That’s where real estate auctions can be an advantage for sellers. The final price holds, and because it is an open, transparent bidding environment, the bidders create the market value of the property, which often exceeds traditional real estate. Homes are still selling at auction, and if you’re looking to put a high-value home on the market, that could be the best news.