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Real Estate Auction Options Principal Gary Gilbert discusses luxury real estate auctions for both sellers and purchasers.

Bidders for Luxury Real Estate Auction Properties

By Gary Gilbert on
Gary Gilbert
I have been involved in multi-millions of dollars worth of luxury real estate au
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Mar 14 in Luxury Property Auction

Are you a possible bidder for an upcoming luxury real estate auction or are you just curious about the process?

I am often asked what it takes to be a bidder at a “high-end” property auction. Many potential sellers ask “Can anybody bid”? For a luxury event, the answer is no, of course unless they are able to meet the qualifications set forth by the luxury real estate auction company and their seller. So, what would those qualifications be? For a luxury event, I would expect any serious bidder would be required to prove legitimacy by producing certified funds, like a cashier’s check made out to themselves, in amounts ranging anywhere from $10,000 to $100,000 or more depending on the value of the asset being offered. The successful high bidder is usually required to put down a deposit, typically 10%, of the total sales price or also known as the “total contract price”. The “total contract price” usually refers to the high bid amount plus the “buyer’s premium”, an amount paid by the purchaser in addition to their high bid price. The high bidder typically would tender their cashier’s check and include with that the remaining balance of the 10% which also should be in the form of verified funds.

So, what happens if the high bidder is not able to close in the typical thirty to forty five day period required by the luxury property auction company or simply walks away? This would vary from firm to firm but may include some variation of the auction company and the seller splitting the deposit and then going to the backup bidders to try and close the sale. If a broker is involved in the deal, the deposit may be divided equally between the auction company, the seller and the broker. Again, each firm operates differently. Remember, everything is negotiable. In my experience, this is rare but I have seen it happen.

Is there an upcoming luxury real estate auction that you would like to bid on? If so, don’t go it alone. We would be happy to offer our complimentary services creating the opportunity to advise you as a bidder. Please contact us anytime to discuss.

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