Fasten your seatbelts, get your reserve ready! I have told you all about real estate auctions, and I predicted we would be seeing a whole lot more. Real estate auctions are a great way, in fact, maybe the only way, to unload big, kinda albatross-y homes, as well as your standard multi-million dollar fare. Best example, of course, is Champ D’Or which sold at auction last March 31 in Hickory Creek.; whose contents were just sold off last week. Often the owners are high net worth individuals who dabbled, or rather, over-dabbled in building, went a little too high end, or built in a location that turned out to be just plain WRONG!
Then there are vacation homes often owned by high net worth individuals who just want to be done with them. Well, guess who has jumped in to help? Our friends over at Heritage Auctions in Dallas, Texas. Heritage also has galleries in New York City, San Francisco, and Los Angeles. Did you know that Heritage has slipped right up on Sotheby’s and Christie’s (and, some say, moving up on) to become the world’s third largest auction house? Now the venerable art and collectibles auctioneer has announced the addition of Luxury Real Estate auctions to its growing portfolio of 30+ Auction categories.
The Heritage folks are so smart: not only will this net them more fine art and collectibles to sell, it will net them the very dirt and walls that surround all that stuff like, for example, the contents of Champ. Brilliant stroke!
The timing may also be more than perfect: two of the country’s top real estate auction houses are embroiled in nasty finger-pointing lawsuits. North Carolina-based Grand Estates Auction has charged New York based (and Sotheby’s sort of affiliated) Concierge Auctions of using sham bidders and other fraudulent tactics to inflate its transaction volume, and is seeking $23 million per claim. Concierge sold Champ D’Or here last March and more recently, an estate in Plano. Grand Estates, based in Charlotte, and two couples/home sellers alleged that Concierge published auction results for sales that never went through or involved “shill” buyers. The buyers, in collusion with the company, allegedly failed to register for the auction or pay a $100,000 registration deposit. The suit says deposits were returned in many of the sales. Further, Grand Estate says Concierge allegedly misrepresented its sales numbers and used web crawlers to inflate its Internet traffic. (Say what?) Of course, Concierge had already sued Grand Estates, alleging the firm set up fake email accounts to publish “false and defamatory” stories (what we call troll comments) about its competitor and steer business to Grand Estates. While these two duke it out, Heritage ought to sail right down the runway.
Unlike traditional real estate listings, sellers with Heritage Luxury Real Estate Auctions work with the team to maintain control over the entire sale, setting the date, marketing strategy, and terms of the auction. Relax agents, that team includes YOU. Selling at auction, of course, creates a competitive bidding environment, where fully-qualified and motivated buyers participate in a transparent, non-contingent sale — all within 60 to 90 days’ time frame from beginning to closing.
Do not, repeat, do not confuse auctions with foreclosures. The Luxury Real Estate auction format accelerates the selling process, creates a sense of urgency with buyers and eliminates carrying costs while the vetting process brings in something every Realtor would kill for: fully qualified buyers.
Experts tell me that homes that sell at auctions are homes that are simply not going to sell the traditional way: list, sign, MLS, wait for buyer. They may be too specialized, or overbuilt, or in the wrong location, or the sellers have grown tired of waiting. (Sound like Champ?) But never mind all the negatives: if a home is highly desirable and you can get a lot of people excited about it in a short, defined period of time, and you market the bejesus out of it, you can sell it.
More and more sellers, in fact, are coming to auction houses first so they don’t have to hassle with the time and inconveniences associated with listing a property the traditional way.
The Directors of the new Luxury Real Estate category are Nate Schar, who will be working from San Diego, Scott Foerst in Atlanta, and Amelia Barber, holding down the fort in Dallas, where Scott and Nate spend half their time anyhow. Scott and Nate have a 13 year history of selling multi-million dollar properties by auction throughout North America totaling more than $250 million in sales. Previously, Nate was an asset manager at one of the Midwest’s top wealth management firms, and Scott served as architect and senior project coordinator with both commercial and residential construction firms in the Southeast. Both came to Heritage from — surprise! — Grand Estates Auctions. Amelia comes to Dallas by way of The Hill as in Washington, D.C. where she was a lobbyist. Amelia also managed operations for a national financial trade association.
“Heritage is the first fine art and high-end collectibles auctioneer to offer Luxury Real Estate auctions in this specific format, a perfect fit with our portfolio of services catered to high net worth individuals,” said Paul Minshull, Chief Operating Officer of Heritage Auctions. “These auctions will put the seller in control and provide liquidity in a timely manner.”
The properties presented by Heritage Luxury Real Estate Auctions will be marketed with customized advertising plans regionally, nationally and internationally, including Heritage’s 750,000+ bidder members from more than 186 countries. (How do you spell high net worth? HERITAGE.) The auctions will be marketed out the wahzoo to qualified buyers.
“Our sellers are finding this process a tactful and savvy means of resolving their traditional selling dilemma,” said Scott. “Auctions help maximize the full market potential of Luxury properties.”
So I asked Nate, Scott and Amelia: will this be vacation or primary homes?
“Vacation properties about 80% of the time,” said Nate, “There’s a lot of vacation homes out there and available, thus more inventory to sell.”
Many of those homes are free and clear with zero mortgage debt. Heritage will not be selling private planes and yachts, at least not at this time.
But there will be some primary residences in the pool. The trio plan 18 to 24 auctions per year, with the first one set to rock and roll this fall. I’m off to Maine next week — I’ll take this one!