How Home Auctions Benefit Buyers and Sellers in Today’s Fierce Market

Home auctions have gained momentum over the past year amidst a pumped-up housing market with meager inventory and historically high demand in many places. For sellers, home auctions provide high market prices and cast a wide net for ideal buyers. For buyers, auctions create a well-needed sanctuary to the craze of finding your perfect home in a national housing shortage.

 

Auctions allow both sellers and buyers to see what is happening on a particular piece of real estate as it unfolds. For all parties involved, home auctions provide transparency, urgency, and a broad range for people looking to sell or buy the property of their dreams.

 

What has driven such high demand and low inventory?

As the pandemic has created significant uncertainty, the housing market has been in a state of frenetic change. Demand significantly outpaces supply rising from historically low mortgage interest rates and a drastic shift to remote work, which has created more interest in purchasing properties with at-home workspace. At the same time, supply has dwindled significantly.

According to a recent New York Times article, we are currently seeing about half the available home listings nation-wide compared to this time last year. In contrast, home prices have appreciated incredibly, up nearly 13% nation-wide compared with January 2020. These circumstances have created a hotbed for bidding wars. In Redfin’s survey of metropolitan areas, it ranked the following regions for rates of competing offers:

  • Salt Lake City at 90%
  • San Diego at 78.9%
  • Bay Area at 77.1%
  • Denver at 73.9%
  • Seattle at 73.8%

The market shrinkage stems from a combination of factors. A massive halt on building projects from a building sector still weaker than before the 2008 housing crisis has left consumers with fewer new-to-market options. People who would have typically sold have stayed put due to the pandemic, especially older folks who would have moved to group homes and placed their houses on the market. The contracted economy has created a standstill of sorts, hindering folks from taking on higher mortgages and providing a stopgap with mortgage forbearance. All of these factors have kept a high percentage of standard inventory in gridlock.

The cost of construction is also diminishing the availability of new inventory. For example, lumber prices are more than 130% more than they were at this same time last year. Recent increases in oil prices are also escalating building material costs, which impacts all new developments. In addition, there is a national shortage of building-skilled workers. These conditions drive an increase in construction costs, resulting in fewer new homes being built, delays for those in construction, and higher prices for the resulting product. As a result, the demand for existing homes is even higher.

The logistics of selling a home have also impacted supply. People aren’t too keen on having loads of strangers moving through their homes during traditional open houses or inspections. And many homeowners more susceptible to the virus are choosing to hold off on the rigamarole of face-to-face interactions with potential sellers

And finally, we have the snowball effect. People who don’t fall into any of the above categories and otherwise would have sold are seeing a market freeze and deciding to wait until the dust settles.

How Home Auctions Create a Calm in the Storm

Home auctions can buoy you during turbulent times like these. Auctions allow people to buy and sell properties remotely, a safeguard to a business that generally works face-to-face. They allow for more transparency in price for both the general market as well as with competing offers. With over 56% of buyers facing bidding wars in traditional real estate, auctions circumnavigate hidden prices, keeping everything out in the open.

Some especially “hot” markets have seen a surge in auction-based sales over the past year. In some cases, the interest in online home auctions has grown by 70%.

How to Make Home Auctions Work for You

So how can you use home auctions to work to your advantage? At Luxea, we want both our sellers and buyers to have the most market advantage, one that encourages all parties involved and leaves a sense of security and transparency in the process.

Buyers

Buyers should get all their ducks in a row early. If possible, see properties the moment they hit the market. Have all of your paperwork ready, including pre-approval letters for your mortgage. Also, know your end-of-the-line budget so that you can control the sense of disappointment if you see the home you’re vying for go above your top-level price. Again, the benefit to an auction is that you see this in real-time instead of getting up your hopes on a home only to learn that you’ve been outbid.

Our online platform shows you where your offer stands compared to other bidders, as well as access to an array of unique properties. It creates buyer premiums as low as 5% and never greater than 10%, opening bid incentives, and no set cost, which would price out some potential buyers.

Sellers

Sellers can list their properties to have far reach and get you the best market price. Our agents work to provide bidding metrics with real-time feedback and no punitive fees for deciding not to sell.

In a market that has been in serious flux since the start of the pandemic, we want to offer some sense of ease and assurance that we can help you whether you are looking to sell or buy.

Contact us today to find out more about selling or buying luxury properties through our auctioning platform.

Luxea Global Auctions offers majestic Montana home

Contact Information:

Jeff Manning
Luxea Global Auctions
Chief Executive Officer
jeffm@luxeaglobalauctions.com
844-367-7653

FOR IMMEDIATE RELEASE

Luxea Global Auctions offers majestic Montana home on innovative, secure auction technology

Clancy, Montana—Luxury homebuyers can skip the multiple-offer headaches and get their own piece of luxurious Montana living by bidding on a 20-acre idyllic property on Luxea Global Auctions’ secure and innovative platform.

The property, located minutes from downtown Helena, Montana, offers spectacular mountain vistas with surrounding land abound. This stunning more than 8,600 square-foot home sits on 20 acres nestled in the rolling Montana mountainside while still offering easy access to Interstate 15. Designed with comfort and luxury in mind, this gorgeous home features beautiful custom built-ins, top-market upgrades, and expansive views that help you fully understand why Montana was affectionately nicknamed Big Sky Country.

“More and more people want to escape congested cities,” said Jeff Manning, Luxea’s CEO, and founder. “This home is the perfect way to carve out your own piece of mountain paradise.”

There are also numerous advantages to bidding on this property with Luxea’s online platform, Manning added.

“Home auctions are so much more common in other parts of the world than in the United States, and there’s a reason for that,” Manning said. “The auction process offers transparency and certainty to everyone involved. There’s no wondering if you got lost in a multi-offer bidding war. Everything is at the touch of your fingertips using our app.”

Buyers are encouraged to place their bid early by visiting luxeaglobalauctions.com/portfolio/40-martinez-gulch, as early offers may be accepted.

“This really a one-of-a-kind chance to secure a unique, custom, beautifully built home that can become your family’s escape,” Manning said.

About Luxea Global Auctions

Luxea Global Auctions is the world’s most personalized and innovative approach to buying and selling high-end real estate. The company specializes in live, online auctions and marketing that connects the most sophisticated buyers to renowned properties across the globe. Focusing on people first, Luxea creates an individualized experience building long-term relationships between people and properties. For more information, visit luxeaglobalauctions.com.

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January 6, 2021 by Jeff Manning 0 Comments

Redefining the Word Auction in American Real Estate

Does the word auction bring to mind police-confiscated drug vehicles, dilapidated city housing, or Sotheby’s Picassos? In American culture, people often associate auctions with defective assets that sellers want to unload quickly, and buyers gamble on for sight-unseen goods. The opposite end of this spectrum is incredibly high-end objects, such as collector cars or antiquity art, which are often out of reach for most folks.

At Luxea Global Auctions, we want to redefine how you think about the phrase real estate auction. Auctioning property harkens back to mid-1700s Europe, where the gavel clap commonly sold off estates in taverns and coffee houses. Since then, many countries worldwide have used the auction model as a mainstay for moving property due to its sense of certainty, urgency, and transparency.

We want to introduce you to a way real estate is commonly done worldwide, where both the seller and the buyer benefit. Using this way of selling property drives up demand, keeps all transactions in the public eye, and creates a far-reaching range of potential buyers in niche markets. It allows for quicker sales, proper market-value assessment, and an overall sense of fairness and transparency.

The Way Real Estate Auctioning Commonly Happens Around the Globe

In Australia, a country that accounts for the 14th largest global economy with 66% homeowners, auctions have been the primary real estate transaction method for the past 60 years. It started with rural livestock auctions, which transferred to property auctioneering methods. Today, major Australian real estate companies such as Barfoot & Thompson’s Real Estate and Belle Property say auction real estate accounts for 70-80% of how they do business

The seller sets a bottom-line limit for the sale of their property. Ideally, the bidding goes higher, they are assured that they won’t sell for an under-value price. Because of this, auctioned real estate in Australia typically moves quickly, with sales generally taking around 35 days as opposed to 60 plus days of traditional agent-driven real estate. There’s also a large success rate due to the farther-reaching marketed audience. Even before online auctions, it was common for a hundred or more people to show up to a live auction.

South Africa, a country with over 60% homeowners, also commonly uses the auctioneering model. In market economies that can be somewhat unstable, South African auctions allow for a fair value of sale to both the buyer and the seller. The wide-reaching ability of the auction allows for more bidders, creating more demand and value. The public transparency allows for more information around actual market supply and demand.

In Ireland, a place where home auctioning is common practice for 67% of homeowners, sites usually allow for pre-auction property surveys, creating buyer confidence in their purchase and no haggling with the seller after the offer is accepted. In addition, auctioning lends itself to online buying. And due to the pandemic, Ireland has seen a 200% year-over-year increase in online real estate buying in 2020 with a 50% increase in international buyers.

How the U.S. Is Making the Transition to Online Real Estate Auctions

As the U.S. transitions to online real estate auctions, we have a few differences in how it is done and why. For starters, unlike Australia, auctioning in the U.S. needs a mindset shift to normalize. Until more recently, auctioning has been reserved for selling off massive swaths of land and high-end luxury properties instead of the typical way of daily real estate operations.

In addition, although recent events have shaken our economy, the U.S. still stands at number one on the GDP economic stability scale, which is quite different from more volatile economies like that of South Africa, which ranks at 41. So, although our market will fluctuate, auctions serve the purpose of boosting the value of properties that already stand on a stable economic foundation as opposed to maintaining investor good faith.

Similarly to Ireland, we’ve seen a massive uptick this year in online real estate auctions. In the first eight months of 2020, the U.S. saw a 255% increase in online auctioning sales from 2019, which means this new way of doing things might be here to stay.

How to Navigate a New Way of Doing Business in Real Estate

As these new ways of doing business take hold, at Luxea, we want to make sure that both sellers and buyers navigate the process with comfort, ease, and all necessary information. We want our real estate auctioning to provide a sense of certainty, urgency, and timeline control for sellers. That’s why we provide bidding metrics with real-time feedback and no punitive fees for deciding not to sell.

 

We want to provide a sense of transparency with lots of options to find your dream luxury real estate property for buyers. Our online platform shows you where your offer stands compared to other bidders, as well as access to an array of unique properties. It creates buyer premiums as low as 5% and never greater than 10%, opening bid incentives, and no set cost, which would price out some potential buyers.

We create some of the best contract terms for both parties, multi-offer bidding, a worldwide network of real estate markets, normal expected close fees, and hands-on help from our team.

And although this way of selling real estate on a mass scale is new to the U.S., it’s normalizing quickly. At Luxea, we believe that auctions allow both buyers and sellers to see the intrinsic value of doing business this way. We want to help usher you into this new wave of how property can be quickly and effectively sold.

Contact us today to find out more about selling or buying luxury properties through our auctioning platform.