Although it may be hard to find things in life that are guaranteed, with the proper terms of sale and the right auction practitioner, a luxury real estate auction is essentially a guaranty that a property will be sold on a certain date. This allows a seller to move on with other life plans that may have been stalled by a stagnating property listing.

In the world of sales, pricing for a given item is supposed to be adjusted when the marketplace is not responding to a certain pricing level by purchasing that item. Clothing retailers (to name one) live and die by operating under this philosophy. But how can the price of a unique item be properly adjusted if it’s not adequately exposed to the marketplace, allowing buyers to truly respond?

This is a major problem with traditional real estate. In a constant race to remain relevant, visible, and competitive, many real estate brokerages are forced to buy into the same types of ad programs and to use the same, mundane sales techniques. This results in extreme “clutter,” allowing very little room for any one property to stand out above the rest.

Platinum’s luxury auction^® platform creates an incredible pedestal for each of its auction properties – on a local, regional, and global level – allowing them to stand head and shoulders about the rest of the market clutter. This market separation is critical to building a competitive bidding audience.

In many cases, the process of selling a luxury property becomes a Race to the Bottom. Rather than setting list prices competitively at the outset in order to achieve rapid, market-based sales, sellers and brokers will create lofty list prices to “test the market.” Unfortunately, this places them out of the market, and therefore rather than testing it, they end up behind it.

This leads to what is known as Chasing the Market Down, instead of forcing buyers to compete for a property by driving pricing in a upward direction. The result of this downward spiral is often an over-correction in pricing. What’s worse is that these scenarios usually play out over years, an issue which creates huge losses in capital spent servicing the property, not to mention lost opportunity costs and the time value of money.

The luxury auction^® process immediately arrests this downward spiral, and forces buyers to compete for the property within an established set of rules and on a defined timeline. Sellers therefore stay in front of market uncertainties, avoiding valuation adjustments due to low comparable sales and other, negative market factors that may arise.