Under the Gavel
More homeowners turning to auctions for selling luxury properties
Photo by East Coast Photography
This Colonial Revival mansion at 7849 James Island Way will host an open house on Saturday, Aug. 20, from noon to 5 p.m. The 9,008-square-foot home will then go on the auction block on Thursday, Aug. 25, beginning at 1 p.m.
A new trend sweeping the nation is the process of selling high-end luxury homes at auction. This innovative and effective tactic of selling real estate, as opposed to the normal procedure of listing and showing a home, has caught the eye of many non-distressed homeowners who want to sell their home quickly and in a highly visible manner.
An auction by nature is an intense, quick-moving real estate marketing process that involves the public sale of property live, online or a combination of the two.
While many people choose to go the traditional route of buying a house by searching through listings, either using a real estate agent or finding a home on their own, others instead choose to buy their home at a real estate auction. A growing number of people are invigorated by the possibility of achieving the winning bid on a high-end property for a more affordable price.
There are two primary types of real estate auctions:
Reserve auction — Property is sold subject to a disclosed or undisclosed minimum.
Auction without reserve — Property is sold to the highest bidder regardless of price.
The market for luxury homes, while normally slow-moving, has continued to struggle since the recession.
One local seller utilizing the auction process for a luxury property recently contacted their real estate agent, looking for an alternative solution. Julie Little Brewer, of RE/MAX Coastal Real Estate, advised the owner to contact Tranzon Driggers, a national auction firm that has found much success in the Jacksonville market.
After learning about the auction process, the seller decided to engage Tranzon to sell his custom home located at 7849 James Island Way. The home encompasses 9,008 square feet of exquisite features, including six bedrooms, 7 full baths and two half baths, all situated on more than 2.7 acres of waterfront in the Deerwood Estates enclave. The live auction, scheduled for Aug. 25, will be preceded by two preview days, the second of which is an open house to be held Saturday, Aug. 20, from noon to 5 p.m. Simultaneous online bidding will also be available.
According to David Bradshaw, president of Tranzon Driggers, many distinctive assets, such as premium automobiles or fine art, are frequently sold at auction, and the process works much the same way for luxury homes. The reasoning is that homes in the conventional market are easier to price, while a multi-million-dollar property is much more difficult.
“A unique property with unique features needs a different approach, so prospective buyers can have a better appreciation for the details,” said Bradshaw. “It also helps the seller control the timeline.”
While the auction approach was once reserved for imploding financial institutions and their distressed assets during the recent economic downturn, the post-recession, non-distressed seller has found an opportunity to highlight their real estate in a sea of conventional listings. Instead of adding to the existing inventory of local listings, an auction can provide a distinct strategy that allows the home to be marketed on its own, without competing with other active listings.
Because of the concentration of a high volume of marketing in a short period of time, a well-advertised auction campaign would also provide national and international exposure to local real estate. Tranzon’s live-online bidding platform allows sellers to take advantage of a larger audience and interested buyers to participate live onsite or remotely from almost anywhere in the world.
The entire process takes roughly 10 weeks from listing agreement to closing, providing sellers a well-defined timeline. Pre-auction marketing exposure lasts roughly one month, culminating in an auction event followed by a short, contingency-free closing period.
A typical auction campaign is much more calculated than a conventional home marketing effort. Bradshaw noted that the strategy at Tranzon is simple.
“We provide intense, focused marketing to potential purchasers and deliver professional services that exceed the expectations of the seller,” he said. Elizabeth Hudgins, a Realtor with Berkshire Hathaway HomeServices Florida Network Realty, recently sold one of her listings at auction, a riverfront property in San Jose.
“This was my first experience being a part of a luxury home auction and it was all positive,” Hudgins said. “If a property has been on the market a long time and there have been no acceptable offers, I believe it is the responsibility of the listing agent to give the seller every opportunity to get the property sold, and this is one of them.
In Hudgins’ case, the entire process from listing to sale was eight weeks, which is quite a short time frame for the luxury market. An added bonus is the excitement of auction day.
“I encourage every realtor who has not been to an auction to attend, either with or without a buyer,” she said. “It’s a great way to learn the process so they can be knowledgeable enough to discuss it with an interested seller.”
The live and online auction of 7849 James Island Way will take place Aug. 25 beginning at 1 p.m. Learn more at www.tranzon.com or call David Bradshaw, CAI, AARE at 1-877-374-4437.
Florida Times Union, August 18, 2016
Homes editor Anne Hammock contributed material to this story
About Tranzon Driggers
Tranzon Driggers is a member company of Tranzon, LLC. Tranzon is one of the largest real estate auction companies in the country, with 30 offices coast-to-coast. Tranzon’s accomplished auction professionals are widely recognized as leaders in the auction industry. All Tranzon companies are independently owned and operated.