Auctions have finally arrived in earnest in Palm Beach County, Florida and will provide a much-needed solution for our high inventory of luxury homes. Auctions have always been around on a small scale but now that RealEstateAuctions.com has expanded to Florida, auctions will be a much more common platform for sellers in our marketplace. For example, Palm Beach Gardens alone has more than 800 unsold homes that have been on the market more than one year with pricing over $500,000.
Many people ask why homes sell easier at an auction and the answer is simple: it’s all about correct pricing, advertising and creating a sense of urgency for the buyer. In an auction, an opening price is set and bidders typically ratchet the price upward in a very short amount of time, vs. a traditional listing in which the price is set and lengthy negotiations usually ensue in which the price almost always declines. Often, especially in a difficult economy, there might not even be any offers or negotiations with a traditional listing.
In an auction, sellers typically pay a lower commission rate but also are required to contribute funds for marketing. These are funds that the auction agent and company will spend directly on advertising that auction, and the company is accountable for that spending. In a traditional sales platform the agents do market but it tends to bring buyers and credibility to their brand and not the individual home. Also, auctions alone bring a different buyer clientele to the marketplace, typically ensuring lots of buyer activity for the home. Statistics show 50% of homes auctioned are sold that day, with 50% of the remaining inventory selling in the following two weeks from an auction attendee.
Many sellers ask “But what about my agent?” Well, the seller can move forward with an auction when the listing expires with their agent, or we can partner with their agent and take the home into our auction platform. We are not here to compete with the real estate agent, we are here to offer agents an additional marketing tool they can offer their client, keep their listing and get paid for their efforts.
Rebecca Giacobba is a Realtor® with RealEstateAuctions.com and a Team Leader for the company in Palm Beach County, Florida. In this blog posting, she contributes her thoughts about the relevance of auctions for luxury homes in the area. If you are interested in learning more about auctions or to see if your home is eligible for our program in the Palm Beach County area, call her at 410-320-4868.