There are a lot of real estate auction myths that are simply not true. Unfortunately, these misconceptions can make it seem like buying or selling luxury real estate is more challenging than it really is. False information can also make the process seem confusing and intimidating and may ultimately drive people away from participating in auctions.
Whether you’re buying or selling a high-end property, don’t listen to these five common myths about luxury real estate auctions.
1. Sellers Turn to Luxury Real Estate Auctions as a Last Resort
It’s a common belief that real estate auctions are only necessary when homeowners can’t successfully sell their home through a traditional agent. However, many luxury property owners choose to sell their homes at auction before they even consider a standard real estate listing. This is because auctions provide a variety of benefits that aren’t offered through other selling methods. For example, luxury auctions are much faster than traditional sales, as bidders come prepared to purchase the property right then and there. Additionally, auctions are an extremely effective way for sellers to find a number of qualified buyers.
2. Luxury Real Estate Auctions Are Private
Luxury real estate auctions are generally open to the public – anyone who is eligible can bid on the properties being sold. If real estate auctions were private, only a limited number of bidders would be able to engage in the sale. And with fewer participants present, sellers may not receive an offer they are happy with. The more bidders you have at an auction, the greater the competition – and the higher the final purchase price.
If you’re interested in a particular piece of luxury real estate, simply contact the property’s auction house. Once you’ve indicated your interest, you’ll receive all relevant information so you can participate on auction day.
3. Real Estate Auctions Are for Homes That No One Else Wants
It’s true that certain types of real estate auctions are reserved for foreclosed (and often poorly maintained) homes. However, these should not be confused with luxury home auctions, as they are quite different and completely unrelated.
When you work with a reputable auction company, you’ll see that the homes for sale are of the highest quality. In fact, many of these properties are so sought-after that they result in intense bidding wars. This often drives the price far past market value. Plus, in many cases, these properties are so high-end that an auction is the most effective way to find a qualified buyer.
4. Bidders Cannot Personally Inspect Homes Sold at Auction
Another common myth you should ignore is that bidders cannot personally inspect homes that are going up for auction. On the contrary, when you or your real estate agent convey interest in a particular property, you will be invited to take a personal tour prior to the auction date. This allows you and your real estate agent to view the residence in person and determine whether or not it will be a good fit. Any questions you have about the property can also be answered during your private showing.
Sellers and their agents understand that most buyers won’t want to bid on or buy a home sight unseen. Therefore, everything about the property will be made available to you before the auction begins. This often includes important information, such as the home inspection report. Of course, if you find that the property does not meet your expectations for any reason, you are not obligated to bid or engage in the auction.
5. You Must Pay in Cash at Luxury Real Estate Auctions
While some antique auctions may require a cash purchase, the same is not true for luxury real estate sales. Luxury properties often sell for very high amounts. Therefore, it would be unreasonable to expect buyers to be able to hand over cash right away. Instead, buyers can finance their purchase through a mortgage. As with traditional home purchases, buyers should arrange financing prior to bidding. This ensures that, if you win the auction, there will be no unnecessary delays in the transaction.
Buy or Sell Luxury Real Estate with Help from Elite Auctions
Don’t let myths keep you away from the home of your dreams – or from making a profit on your luxury property. Real estate auctions can be both exhilarating and rewarding and are an effective way for both buyers and sellers to reach their desired outcome.
Whether you’d like to buy or sell a luxury home, Elite Auctions is here to help. Our knowledgeable team will walk you through the entire process to ensure all of your questions are answered. For more information about luxury real estate auctions, or to set up a meeting with one of our listing agents, contact us today!