Both traditional listings and auctions work. In our experience in the luxury home market, auctions are more effective. The main reason being is urgency. With luxury homes, the buyers are typically busy with work or are traveling etc. There is a lack of urgency. They may love your home, but they know that higher priced homes are typically on the market longer. We create that urgency along with a competitive environment. We have numerous qualified buyers all in one room, all of whom want the same property. The advantage to the buyer is they get to see who the other bidders are and what they are willing to pay in real time. As the seller, your home gets sold, and you do not have to pay the commission.
The word “auction” in the property description will drive more buyers to your property, and the more people see your home, the more likely they are to make an offer. This process creates a competitive bidding environment that drives prices up to get you top dollar. For years, jewelry, classic cars and one of a kind art has been sold at auction. It’s a great business model for luxury properties that meet our criteria.
If your home sells in phase 1 or phase 3, you will pay the standard commission rate. However, in phase 2 (the auction phase) you do NOT pay the commission. The buyer pays a 10% premium which covers all commission.
Our 3 phase system has not happened by accident. We have tested various options including going straight to auction. Our experience has been that following the 3 phase system yields the greatest results. They work together. Phase 1 drives interest and a general feel for the market. This feeds the auction in phase 2. The auction gives a clear view of what buyers are willing to pay. If it still does not sell, phase 3 is able to leverage the feedback from phase 1 and 2 to help the home sell.
