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

Bids Placed Prior to a Luxury Real Estate Auction

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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Apr 17 in Luxury Home Auction

I am often asked what is the best way to handle bids received prior to something like a luxury home auction.  At first glance, one would think that sellers would be thrilled to receive bids prior to the auction event, which they should, assuming it is a strong number.  However, some sellers may not want to consider accepting a pre-sale bid, especially if they are offering additional properties in something like a multi-property event. Why would a seller have concerns about accepting a bid in this scenario? The general concept I hear most often is the fact that should the word get out as to what that accepted bid number may be, the stage may be set for numbers achieved at the scheduled auction with those number being based on the number that the seller was willing to accept pre-auction.

Again, this example would apply only to a seller who is offering multi-properties, someone like a developer.  For someone like a stand alone seller offering only one asset, the pre-bid psychology is much different.  Should a seller receive a pre-bid that was generated due to the auction event, the luxury real estate auction company would present the offer to the seller and make their recommendation as to whether the seller should take the offer.  The final decision, of course, is made by the seller.  If the seller declines their offer, the auction firm tells the bidder that their offer has not been accepted and wishes them luck at the upcoming auction.  If the seller accepts the offer, a deposit is tendered, escrow is opened and the luxury property auction company makes their best efforts to let the world know that the property has pre-sold and no auction will occur.

Keep in mind that regardless of the situation, the date-certain event produced by the auction was the catalyst that forced buyers to the table, something that was not being achieved prior.

Would you like to entertain pre-bid offers on your luxury asset?  We can show you how to increase the odds of making that happen.  Please contact us to discuss your property, the auction method and the auction companies competing for your business.

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