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Top 10 Luxury Real Estate Auction Myths

 

Selling your luxury home through a reputable luxury real estate auction company such as Supreme Auctions is a smarter choice than traditional methods.

A growing trend is becoming more apparent with sellers of high-end properties. Sellers are seeking out alternative methods by which to sell their luxury homes due to the fact that the traditional real estate model is broken. Sellers understand that 20th century methods are not working in today’s’ 21st Century world.

Here are 10 common myths about selling your high-end home with a luxury real estate auction hosted by a trustworthy company such as Supreme Auctions.

1. More Auctions = More Reliable Auction Company

A common misconception is that any auction company with a lot of auctions must be the best in the business. In the luxury real estate auction industry, this is simply not the case. The more auctions a company has, the less time they have to spend on your property, thus leading to less marketing, less one-on-one support, and an impersonal experience.

An auction company simply can not keep track of what is going on with holding 20-30 auctions a month, which is why these larger companies tend to sell their properties for 30%-40% less than a boutique firm. Auction companies with a higher number of auctions per month also tend to have a high cancelation rate, because they are unable to attract enough bidders for an auction.

Supreme Auctions purposefully takes on a select number of auctions per month to ensure a personalized experience for each seller. Every auction comes with many opportunities for one-on-one conversations with auction staff members, and a customized marketing campaign that maximizes the exposure of your home to motivated buyers.

2. Auctioned Properties Sell For Less

If you choose the right luxury real estate auction firm, this is simply not true. The most luxurious items in the world are sold at auction, not through traditional means. When the right buyers fight against each other, the seller always wins. However, Supreme Auction holds numerous records for the highest selling price of luxury homes in many states.

Supreme Auctions’ vetting process ensures they only partner with sellers whose homes have a high probability of selling at or above market value. This is done through their prediction database, which is similar to that used by Sotheby’s, Christies and Barrett-Jackson Auction Companies.

Maverick Commins breaks down this myth in this video. 

3. Auctions Are Only For Foreclosed Or Distressed Properties

While some auction companies specialize in only selling distressed or foreclosed homes, not every auction company does, very similar to traditional realtors that only specialize in distressed properties. Furthermore, most luxury homes sold at auction are not foreclosures in the 21st Century.

Supreme Auctions has never sold distressed properties. They vet the luxury homes they select to ensure the quality of the home before moving forward with the seller.

Supreme Auctions’ CEO Maverick Commins further explains Supreme Auctions’ process in this video.

4. More Guests = More Bids

More guests at the auction does not mean you are going to get more money for your luxury home. Public auctions can bring in parties who are interested in the process: the bidder’s family, and neighbors who are interested in knowing what their own property is worth, thus creating an inaccurate perception of who is interested in buying.

The true measure is not how many people show up to the auction, it is about who is qualified and motivated to bid.

Supreme Auctions registers all of their bidders to get a sense of how many people will be bidding on the property. By registering bidders, you, the seller, can be confident that there will be a dedicated buyer-base in front of your home on auction day.

5. Sellers Have To Sell

You do not have to sell your home to the highest bidder if you set up prior channels to protect yourself.

Some companies allow you to have the option of setting a reserve amount on your home before the auction. Having a reserve is a security option for you to guarantee that your home sells for an amount you are comfortable with, assuming the bids exceed the reserve amount. If bidding does not reach the reserve, the home will not sell.

Not all luxury real estate auction companies offer auctions with reserve amounts.  Supreme Auction does not set reserves as this type of auction is not successful in the 21st Century.

An esteemed auction company will conduct a market analysis to set a realistic expectation for bid amounts.

You do not have to wait until auction day either. If you partner with Supreme Auction, you can cancel the auction anytime before opening the bid. This includes pre-auction sales; you do not have to accept any bid before the auction and can cancel the auction if you feel like pre-auction bids are too low.

6. Marketing Is Not Worth the Price

Many real estate agents do not bother marketing properties extensively because they are paying for marketing themselves in their traditional models. This oversight can end up costing you, as the seller, more money than a marketing campaign if your luxury home does not sell within 60 days. Luxury properties typically stay on the market an average of almost 500 days. When a seller totals their carrying costs, the traditional real estate model becomes very expensive today.

Supreme Auctions’ Accelerated Marketing Program is customized to fit your high-end home and significantly betters your opportunity of selling your home faster to a larger pool of motivated buyers.

Supreme has numerous properties that were on the market for 2+ years before the seller came to Supreme Auctions. In all of these homes, such as this luxury home in Brentwood, TN and this high-end property in Atlanta, GA.

7. An Auction Will Not Work For My Home

Many sellers believe their luxury home is too unique to sell at an auction. Does your high-end home have a kitchen, bedrooms, bathrooms and a living area? If it does, then an auction can work for you.

What matters most in an auction is not what your home looks like, it is what type of buyers you can attract. Supreme Auctions vets all of the prospective luxury properties before agreeing to market and auction them. Doing so will increase your property’s probability of attracting a motivated buyer pool that is interested in your home.

8. Online Bidding Is Better

Online bidding is an impersonal experience that takes away your ability to know who is trying to purchase the luxury property. Online bidding also disallows you the experience of being on-site during the auction and of having one-on-one support from professional auction personnel.

Supreme Auctions conducts all of their auctions in person, at the luxury home. Bidders will be able to take one last tour of the property before the auction begins, which is not the case with online auctions. All of Supreme Auctions’ auctions are hosted by professional auctioneers and auction managers who are ready to assist buyers as needed.

9. Sellers Boost Bids

This scamming scheme can happen with online bidding. Sellers and agents are not allowed to put in fake bids that pressure real buyers to bid higher. This is known as bid fixing, which is a federal offense.

For your added protection, all auctions hosted by Supreme Auctions are done live on-site. You will be able to see exactly who is bidding on your home.

10. Any Auction Company Will Do

Not all luxury auction companies are the same. Some take on hundreds of homes and sell them for well below market value, while others only take on certain types of homes or those listed within a specific price range. Do your research just like you would if you were choosing a doctor, a dentist, a lawyer, a wealth manager, or a real estate agent.

Maverick Commins offers his advice on the topic in this video.