Off the coast of Southern California, on Catalina Island, there’s a home with sweeping views of the nearby bay. The house sprawls over more than 3,700 square feet, includes four bedrooms and four bathrooms, and has a host of high-end features.
But despite its many amenities, the home languished on the market literally for years.
Krystal Aeby, chief marketing officer of Concierge Auctions, said Wednesday afternoon at Inman Luxury Connect that up until recently the home had been on the market for more than 800 days, experienced multiple price reductions and lacked any real comps on which to base a sale.
It was a challenging situation to say the least.
But then, just this week, the home finally sold for $2.688 million. So what finally made a deal happen?
Aeby spoke at length Wednesday about the benefits of selling luxury homes via auctions in addition to listing them on a more traditional market. For starters, Aeby said, homes spend significantly less time on the market. In the case of auctions, she explained, a date is set in advance for the listing to go public. Another date is set for the close of the auction, and that’s it.
That time period from start to finish is typically 60 days, which Aeby said is a major boon given that the “largest factor in determining the price of a luxury property is the number of days that it’s marketed.” In other words, homes that sit on the market lose value.
Other benefits of auctions include being able to attract buyers from a broader geographic area, Aeby argued, and potentially giving homeowners more control over the selling process.
“A lot of your clients, particularly with luxury, have control of every aspect of their lives,” Aeby said.
In the case of the Catalina house, after 39 days of exposure the house received 197 visitors, who ultimately translated to nine bids after just 39 days. Significantly, both agents also “got their full commissions” on that sale, and Aeby advised agents who want to use auctions to make sure that they’re turning to companies that protect agent compensation.
Auctions may not be perfect for every property, but Aeby said Wednesday that they do represent a unique approach that works well for certain listings. Which is to say, agents should add auctions to their repertoire.
“An auction is a great non traditional marketing strategy,” she concluded.
Correction: The home Catalina home sold for $2.688 million. This post originally misstated the final sales price.