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

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Misleading "Absolute" or "Without Reserve" Luxury Home Auctions Still Prevalent

by Gary Gilbert
Gary Gilbert
I have been involved in multi-millions of dollars worth of luxury real estate au
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Sunday, 12 June 2016 Category Uncategorized

It's been a while since I wrote about the topic of the bogus "absolute" or "selling without reserve" auction as it relates to luxury home auctions.  Let's pick up the topic again today as it seems to me that the bait and switch is being used today more than ever, in particular by one firm who on the surface appears to be legitimate.

So, why should this concern you as an agent or as a private seller considering a non-distressed luxury real estate auction?  Because it opens the door for litigation for you as a seller or agent while eroding the buyer base interested in purchasing a high end home at auction.

Here is how the bait and switch happens:  A luxury real estate auction company tells their seller that they will advertise the event as "absolute" or "without reserve" which in theory should generate a high amount of interest from potential buyers.  I say in theory which is true if the event is a legitimate absolute auction.  The company tells the seller that they will cancel the auction a couple of days prior if the interest is not sufficient.  I've been dong this a long time and can tell you that most of the best buyer candidates surface the day before the auction.  By cancelling, one is not giving the auction a chance to work.  If this is even a possibility, any firm should simply pass on the business in the first place.  Not to mention the unsuspecting buyer.  Imagine that you as a potential buyer have traveled and are ready to bid only to find that the event has been cancelled.

I can't tell you how many times this happens.  The auction company quietly cancels the event and then spins the true results in media.  Consider it a big red flag if you hear that an absolute luxury home auction sale is "pending" or my favorite- it has been postponed due to overwhelming interest.

We can dig into this very important topic when we speak.  Reach out anytime to discuss this topic or anything else prior to signing anything with any company.  I'm happy to help.

Gary

404.784.5759

Tags: absolute luxury real estate auctions, absolute luxury home auctions, absolute real estate auctions, absolute luxury real estate auctions

Extending a Luxury Home Auction due to Overwhelming Interest- I Don't Think So.

by Gary Gilbert
Gary Gilbert
I have been involved in multi-millions of dollars worth of luxury real estate au
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Sunday, 23 August 2015 Category Luxury Real Estate Auction Companies

I guess if you've been in the luxury real estate auction business as long as I have, one would think one had seen it all.  However, I stand corrected.

It seems now that one of the bait and switch tactics being used out there today in the marketplace is to extend the auction's scheduled date due to overwhelming interest.  Really?  So you're telling me that there was so much response for a luxury home auction campaign that extra time is needed to accommodate extra potential bidders?  That is absurd and really just code for "the results weren't what we promised and we need extra time to try to salvage this deal"

If you or you and your client are considering a non-distressed high-end real estate auction, let's talk.  I can save you a lot of time and money by educating you on the process including how to avoid pitfalls like the above mentioned, the absolute auction that can be cancelled and other questionable tactics.

I'm happy to answer any questions you may have.  Just ask.

Gary

404.784.5759

Tags: absolute luxury home auctions, luxury home auctions, premier home auction, luxury real estate auction companies

Cancelling an Absolute Luxury Home Auction a Few Days Prior? Give the Auction a Chance to Work.

by Gary Gilbert
Gary Gilbert
I have been involved in multi-millions of dollars worth of luxury real estate au
User is currently offline
Wednesday, 15 July 2015 Category Luxury Home Auction

Today, one of the disturbing new trends in our industry I want to share with all of you involves that of what else?  You guessed it, the bogus absolute auction.  Of course since we focus on the luxury home auction world here, I wanted to share with you some color on the latest bait and switch being used out there.  If you are a luxury home owner or the agent of a luxury home owner considering a non-distressed event, please take note and don't fall victim to this ploy.

Here is how one of the latest deceptive models out there is structured:  The luxury real estate auction company tells the potential seller that they will advertise the auction as "absolute" or "selling without reserve" in order to create maximum interest and hopefully maximum number of registered bidders.  The seller is told that they and the auction firm will gauge the interest level a few days prior to the auction based on whether or not there are opening bids, if so the amount of those opening bids, and the financial status of the interested bidders, if any, at this point.  If there are no opening bids, the opening bids are low, or there are no bidders at this point, the auction is cancelled and the results are either spun in the media (overwhelming interest requires auction to be postponed or there is a sale pending) or simply not mentioned anywhere in the media.

So, who are the losers in this scenario? First, the seller, who has spent $50k plus upfront, in advance to advertise and market the auction is out that money and right back where they started from with the home still for sale.  In addition, now that the auction has been cancelled, potential future buyers will question what is wrong with the property and will discount that unknown factor into what they may be wiling to pay for the home in a traditional sale.  Second, the potential buyers who spent time and money conducting their due diligence prior to the auction by traveling to tour the home, etc. only to have the rug pulled out from under them.

I've been doing this for a long time and know that most of the best buyer/bidder candidates surface the day before or even the day of the auction.  These are private, affluent buyers who prefer to keep a low profile.  Why on earth would someone cancel an auction a few days prior without giving the auction a chance to work, especially the day prior and of the event?  By cancelling the auction, one is not giving the auction any chance at all to work.

Imagine that you have traveled a week or so prior to tour the home being offered and then found out after you had already confirmed a second trip to attend the auction itself that had been cancelled.  How would you feel?

Let's don't let this happen to you or you and your client.  Reach out anytime to discuss this very important topic or anything else you may want to discuss regarding high-end real estate auctions.

Gary

404-784-5759404-784-5759

 

Tags: luxury real estate auction companies, absolute auctions, absolute luxury home auctions
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