Auctions Gain Popularity for Sale of Luxury Property

In the not-so-distant past, real estate auctions were thought to be reserved for foreclosures and distressed properties, but these days, auctions have a taken a turn to the luxurious as more and more high-value properties are being offered to the public via auction. Celebrities, CEOs, and entrepreneurs have discovered auctions as a viable alternative to the waiting game that goes hand-in-hand with traditional real estate transactions. With an auction, the sale is expedited, and the whole process is transparent for both buyers and sellers.

There are two types of auctions for residential and commercial properties: reserve or no reserve, sometimes called an absolute auction. In the former, the seller can reject any bids he feels are too low; in the latter, whatever price is the winning bid stands.

Luxury auctions attract both sellers and buyers due to their transparency. The auction will achieve the true Market Value on auction day, no one feels as if they are bidding too high or too low; everyone is on an equal playing field. Because of that, the price of properties offered at auctions continues to climb. While it has become common to auction a luxury home valued in the low millions, $10 million and $20 million—or higher—properties are finding an audience here as well.

According to a recent article on Bloomberg’s website, luxury auctions are gaining steam among the wealthy as they attempt to sell their mansions. After sitting in the real estate market and dropping their asking price, owners find themselves turning to the alternative: selling at auction. But you don’t need to try the traditional route first. More and more sellers are listing their home for auction initially. And savvy buyers know that auctions are one of the best places to find a fantastic luxury property—often at a great deal—while avoiding the long, drawn-out process so often associated with traditional methods.

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