|On July 25, four properties near Jacksonville, Fla., will be put up for auction, including an estate in Ponte Vedra Beach previously offered at $5.9 million.|
While many toil to sell tattered baseball cards and grandma's dusty cameos on eBay ( EBAY), owners of luxury estates are putting a high-end spin on the world of auctions. A drop in demand for multimillion-dollar homes has forced sellers to consider the undesirable choice of sitting on their properties while they wait for a market rebound, or selling at a discount. Instead, more mini-palace owners are taking their chances on the auction block.
Chris Longly, deputy executive director of the National Auctioneers Association, says auctions can help highlight intangible qualities that should be factored into a home's value. "Perhaps a celebrity lived in it," he says. "What's the value of that? What is someone willing to pay? Or you have this priceless view from a mountain top. We are going to be able to tell you in about six minutes how much that property is worth." These days, most people associate auctions with foreclosed homes. But these upcoming sales are a far cry from the distressed properties that usually get the treatment. J. P. King Auction Co., the nation's oldest real estate auction house, will soon take bids on Eagle Landing Estate, a 15-acre lakefront property in Hickory, N.C., that was originally listed for more than $4 million. Another significant property -- one that might inspire you to stock up on Nike ( NKE) polo shirts and Callaway Golf ( ELY) clubs -- is North Augusta Golf and Country Club, a golf course located minutes from Georgia's Augusta National. Concierge Auctions, with offices in Florida, formed 2 1/2 years ago to take advantage of the growing trend of moving mansions.
July has been a busy month for the company, with several properties up for grabs in Florida. On July 25, four properties near Jacksonville will be put on the block, including a waterfront estate in Ponte Vedra Beach previously listed at $5.9 million. The company has also been retained to auction a 25,000-square-foot mansion in Boca Raton that was previously on the open market for $21.9 million. "We are saying we are going to do this in three weeks," Concierge Auctions President Laura Brady says. "We are not just going to wait for buyers to make offers; we are going to force them all to come to the table at the same time and compete against each other. " A typical property sold through her company has a $3 million price tag. The company says it generates 25 prospects per property, and 85% of its buyers pay cash. Competition eliminates the chance that these "no reserve" auctions will be low-balled, she says. "I have no doubt that any auction we have held has actually brought what market is," she says, adding that auctions are a better play than "dangerous price reduction strategies." "The buyers are just going to watch the price keep going down and down," she says. "They are just going to think, 'Why would I buy it this month when next month it is going to be half a million dollars less.' "