Luxury real estate auctions are a superb way to make your property sell without dragging it along the market and depreciating the value. Because of the created sense of urgency and limited timeline, buyers are keener to purchase the property rather than sit on it. Carrying and marketing costs go down, sellers and brokers have an easier, less stressful time of selling and buying, and there’s no need for several home showings. You could sell your property within minutes beyond market value. It’s the number one way to sell luxury homes and mansions in the US.
Let’s look at how to prepare your luxury property for the auction circuit.
Client Preparation
When sellers and agents and brokers all collaborate, there need to be pre-managed expectations and a conversation about the goals for the selling. This has to happen before the auction. Listing agents, auctioneers, buyer’s agents, and brokers have to understand their client’s expectations to be set up for success.
When you’re going through the selling process, you need to be clear with all parties including brokers and professionals, and buyers on how you can best achieve your goals. Are they realistic and manageable? If so, you could start talking about price and sales timelines.
When you’re honest about your needs and goals early on in the selling, you can clearly get down the conflicts before the even arise. Open communication in the beginning around obstacles and desires is a great way to deal with the problems before they get too large to unravel. When it comes down to negotiations you’ll be better set up for success. If a seller knows what type of price they’re going to receive, or what may happen if a buyer declines to go through with the sale, all parties will have a more satisfying experience. The buyer-seller-broker relationship can remain intact and packed with integrity.
Looking at tools like the Automated Valuation Model (AVM) can help you understand public records and establish a reasonable asking price. This way, you can set a doable selling price point. As a seller, go to auctions and showings of properties that align with your requirements so that you can know what to expect with your own auction process.
What to know about auctions? The people in them are usually a diverse set of people including first-time homebuyers those veterans who purchase luxury homes regularly. Auctions aren’t just delegated for foreclosures. Luxury properties and mansion auctions are more the norm than ever. Understand your deposits and remainder fees so you won’t be surprised going forward. It’s also helpful to know the bidding process and how that may show up for you down the line. Your broker, or an associate at Platinum Auctions, can help you understand all the numbers and timelines so you’re aware of what you’re investing in.
Luxury home auctions are not for the faint of heart. They’re fast and build up quickly and usually end up in a sale. Financing is typically organized in advance of the sale so approvals can be approvals are more efficient and home buyers can get into their new home faster.
Manage Risk
As a person buying or selling, either way, you’re taking a risk. Understanding what risk you can manage, including factors like timing, pricing, and contractual obligations are best to be reviewed before the auction occurs. Your broker should know the vendor’s reserve price and if it matches up with the market value. This is also where marketing strategy comes to life and a wise strategy correlates to a satisfied buyer. Manage risk in your auction process with the help of a broker who follows the following tips:
Prep the Property
As home inspections are necessary prior to bidding, make sure they actually take place. Inspections are great ways to make sure the seller and the buyer have a comprehensive view of what’s being sold, and the amount of repairs and renovations needed beforehand–this can also contribute to the overall cost of the property and helps people make better decisions.
Mind the Disclosure Laws
With varying disclosure laws for varying states, keep in mind that California’s disclosure laws are some of the toughest in the country. Wherever you’re operating, however, understand the bidder’s disclosure packet, aka due diligence package or bidder package, prior to the auction bidding process. Disclosures typically apply to homes sold by private sale but can help in refining the bidding process within state regulations.
Disclosure laws are different in every state, and your broker will know how to deal with these. If you’re in California expect the disclosure laws to be tough and non-yielding. When you understand the disclosure packet from the bidder, aka due diligence package or bidder package, you’ll be more prepared come auction time. Disclosures can help make the bidding process go smoother because they’re within state regulations.
Pre-Planning is Critical
Do your research about your property and take a look at the market at the time of sale. There are a few things to look out for that may affect the property’s value down the line. Knowing the long-term value can help you with the marketing advantage and the promotional value invested in your property. Your selling price could increase as well. It’s worth getting to know your competition.
Looking at other luxury properties that feature similar factors is beneficial in understanding the market that you’re in. Get to know the selling prices of other homes like yours and the amenities so you’re not going in blind into the auction room.
If your property features or is near educational facilities, a fitness center, or deals with varying noise levels, and other environmental aspects, this can increase or decrease your property value.
The Takeaway
Preparing your client’s property for auction doesn’t have to be so hard. In fact, it’s simpler than traditional methods of selling and buying. With the ease and reliability of luxury auctions, you’ll know when you’re selling and that there’s more than one interested buyer in the room.
