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. 

How Benevolence Makes Luxea One Of The Best Luxury Real Estate Auction Companies

By Jeff Manning

At Luxea, what makes us one of the best luxury real estate auction companies is our core philosophies: leadership, excellence, innovation, benevolence, and learning. Of those five principles, benevolence represents our commitment to community service. This drive and passion are most clearly demonstrated through our #LuxeaLoves program, which aims to make a positive impact on the world through philanthropy.

The best luxury real estate auction companies stick to their values

As the founder of Luxea Global Auctions, helping other people is at the core of my personal belief system. I practice a blend of social entrepreneurship and capitalism. I believe that good companies take care of their employees, take care of their clients, and take care of their community. There’s a moral obligation to do all three. If you’re not, you’re really missing the point.

One of the ways I live this value is by using my skills and connections as a professional auctioneer to support nonprofit and philanthropic organizations and causes. On average, I speak to about 20,000 to 25,000 people every year at events, and I encourage them to invest in their communities through fundraising. I am also an active participant in these auctions, and I’m not shy about boosting a specific item to help support the cause. As part of #LuxeaLoves program, I regularly consult nonprofit organizations and others on how to make their auction a greater success. This is just one way that the #LuxeaLoves program can help and support organizations that are focused on a beneficial cause.

Another way #LuxeaLoves is by warming up the bidding base by auctioning off prizes and experiences for a specific cause before the main home auction. With the permission and buy-in from the seller, we’ll put a trip to Napa, a hot-air balloon ride, or a specialty item up for bid, and the resulting proceeds will go to an organization of the seller’s choice. In this way, we’ve been able to use our superior auctioning powers for good.

When people look for the best luxury real estate auction companies to work with, I really believe they should also consider the organization’s values in addition to its track record. At Luxea, we deliver on both counts. When you work with us, you can sell your luxury property and do something great for a cause that you love, too.

At Luxea Global Auctions, we lead with benevolence by investing our time, talent, and treasures into our community and compensate our partners fairly. And, it’s what makes us one of the best luxury real estate auction companies out there. To learn more about us, click here. If you represent a nonprofit or philanthropic organization and would like to get guidance on how to conduct a productive and fruitful auction, email Jeff at Info@Luxeaglobalacutions.com.

The Psychology Of Why An Auction Is The Best Way To Sell Luxury Property

By Jeff Manning

When you’ve decided to sell your luxury property, there’s one emotion you likely don’t want to feel—lack of control. After all, this piece of real estate is something you’ve invested your time, money, and energy into—and you want to see a return on that investment. So, feeling uncertain about the home’s time on market or final sale price is less than desirable.

While a traditional sales process can leave a luxury property on the market for years and leave the seller feeling out of control, a high-end auction can do just the opposite. A luxury real estate auction creates a situation that gives sellers more certainty and control. Ultimately, it’s the best way to sell a unique property, which is why auctions are being used as a marketing tool to drive up demand and increase visibility, according to Forbes.

Specifically, leveraging a customized live and online auction can help sell a luxury property more effectively in three key ways:

Auctions change the psychology of the sale

Luxury real estate auctions come with definitive end dates—the day of the auction. This forces the market to make a decision and act on their interest. When combined with a qualified buyer pool attracted by targeted marketing efforts, this deadline generates more value and control for the seller.

Transparency is key to selling a luxury property

When you really think about it, traditional real estate listings with multiple offers create a silent auction environment. In this scenario, buyers don’t know if they will be successful in purchasing the home, which can cause them to look elsewhere or lose interest. Conversely, an auction creates a transparent process, which allows both the bidders and sellers to understand precisely what’s happening, and when it’s happening.

More competition benefits luxury property sellers

The transparency created by an auction also generates excitement and a healthy sense of competition. When buyers see that they are vying for a property in real-time, it can appeal to their ambitious natures and result in faster decisions and higher bids.

When these three factors come together and are combined with an effective marketing program and advanced technology, it’s truly a recipe for success. By marketing a luxury property in a condensed time with a pre-determined sale date, sellers can attract more qualified buyers and take back control.

At Luxea Global Auction, we help sellers take control of the sale of their unique property by creating customized live and online auctions. To learn more about selling your luxury property with us, click here.