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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

The Psychological Element of an Absolute Luxury Home Auction

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, 26 September 2012 Category Luxury Home Auction

Psychology plays a huge role in that of auctions, especially luxury home auctions.  What do potential bidders think when they see the word "auction"?  Most think "deal", something all auction companies want them to think.  I like to use the phrase that a "high-end" auction creates the "illusion of a bargain".

Now let's take a look at the role an absolute auction plays when it comes to the psychological element.  A legitimate absolute auction is one in which the property is sold to the high bidder regardless of price.  A non-legitimate absolute auction is one in which the event is advertised as selling to the highest bidder but is cancelled on sale day due to lack of interest or insufficient bid prices.  Consider this a red flag and proceed with caution if this tactic comes up. We can dig into this topic in another post but for now let's focus on legitimate absolute sales.

Put yourself in a buyer's shoes.  You live in Texas, for example, and are interested in a Colorado luxury real estate auction that is selling absolute.  You are going to be much more likely to travel up for a property tour and come back again on sale day if you feel that if you are the high bidder, you will be the new owner.  Many others feel the same way and are not local buyers in Colorado either.  On sale day, bidders know that if they are the high bidder, they will be the new owner.  Other than engaging more bidders in the process, the absolute concept consistently generates more active bidding and higher bid prices than would that of an auction with a reserve, either with a published number or without.

I am happy to discuss this topic with you in more detail. Please reach out anytime.

Tags: luxury property at auction, exclusive property auction companies, luxury real estate auctions, luxury property auctions, luxury real estate auction companies, absolute real estate auctions
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