Luxury real estate is based on exclusivity, refinement, attention to detail and historic or innovative design, and unmatched quality. It doesn’t take much to know that luxury real estate isn’t for everyone. However, for those lucky enough to own these incredible properties, do luxury real estate auctions work? Or are they only for sellers with certain properties or buyers looking for specific spaces? In this article, we’ll explore how luxury real estate auctions, and in particular firms like Platinum Luxury Auctions, serve all those looking to sell or purchase a piece of a luxury estate.
Let Us Begin With The Basics
A mansion auction or luxury real estate auction is where the power of technological innovation and expensive marketing expertise come together creating a process that nearly guarantees that estates are sold at a fair market value.
This competitive bidding marketplace replaces the need for traditional listings and open houses with heightened marketing efforts and exposure. Auction firms find specific qualified potential buyers which leads to shorter selling times and more attractive sales prices.
Why We Must Dispel The Myths Around Luxury Real Estate Auctions
When considering whether a luxury real estate auction is right for you, it’s paramount that you do not fall prey to the myths that surround the process. Below are some of the most common untruths about real estate auctions.
“The More Eyes You Have On The Home The Better”
While some don’t believe that luxury properties do well in an auction because they are closed to the public, this couldn’t be further from the truth. When selling a luxury estate, it’s about the quality of potential buyers, not the quantity. Some sellers find that selling their luxury estate on the market draws parties who want to know what their property is worth and come to open houses with no real intention of placing an offer. Private luxury real estate auctions keep the public out and invite only the most serious candidates to tour the property and conduct inspections.
This fact is particularly important for properties that offer unique design features or historic elements. As Platinum Luxury Auctions has access to some of the most elite buyers in the world, the firm takes time to understand what makes each specific property unique. Then, using extensive marketing expertise, the firm connects the right potential buyers with the estate that encompasses these aspects meaning that while there may be fewer physical eyes on the property, those there are serious about the estate and ready to buy.
“Auctions Are Only Used for Distressed Properties”
There are lots of auction firms that sell foreclosed homes, however, Platinum Luxury Auctions does not. In general, the vast majority of luxury real estate properties that are being auctioned are not foreclosures and have no signs of distress. In fact, it’s quite the opposite, most sellers opt for mansion auctions because their property features one-of-a-kind design and is valued at a minimum of >4 million. These sellers chose luxury real estate auctions because they do not wish to waste their time or money listing it on the market where it will be met with unqualified candidates. Platinum Luxury Auctions vets both the properties and the buyers so that everyone involved can rest assured they are getting an exquisite property and a highly-qualified buyer.
Types Of Auctions and Who They Benefit
Nearly all mansion or luxury property auctions end up selling at a fair market price, particularly compared to those sold in the traditional method. This is because when dealing with homes over 10 million, there may not be comparables and they can be difficult to appraise properly. For sellers, this means that it can be hard to define what is fair and what are realistic expectations to have. With luxury real estate auctions, buyers have all the necessary information come with due diligence done so that everything is transparent and above board for all parties involved.
This means that while luxury auctions are for everyone, that does not mean that some aren’t more beneficial than others, depending on who you are and if you’re planning to sell your property or are looking to buy. There are three types of auctions all with their own benefits, it’s important to understand the differences as they are not all built equal.
Minimum Bid Auction: For The Seller Who Wants To Retain Control Over the Selling Price
A minimum bid auction allows the seller to set their lowest acceptable price point, meaning that if no one reaches it they are under no obligation to sell. This allows sellers to keep control over the process and feel secure in the minimum their property will sell for while keeping the option for it to sell for far more.
Reserve Auction: For The Seller That Cares About Who Buys Their Property
A reserve auction is one where the seller reserves the right to reject offers for any reason even if the buyer has put in the highest bid. This type of auction not only allows the buyers to decide what price they will sell for but to whom.
Absolute Auction: Risks and Benefits For Buyers and Sellers Alike
An absolute auction is thought of as the riskiest option for the seller, as it guarantees the sale of the property regardless of what bids come in. There is no minimum bid and the property sells regardless. While sellers can find this unnerving, it does offer benefits as is more attractive to potential buyers meaning more will attend. The more people bidding on the luxury estate, the more likely there is to be a “bidding war” which helps sellers.
Whether you’re a seller or a buyer, a luxury real estate auction will work for you. If you want to take advantage of the new wave of luxury real estate, consider Platinum Luxury Auctions, as they auction luxury homes across the world and are the industry leader. Not only are Platinum Luxury Auctions known for its professionalism, but they offer clients the best marketing experts in the field, connecting the right buyer with the right luxury property, and making sales fast and at the right price.