The higher the price, the smaller the market. All too often, the reality for agents selling high-end homes is working with a narrow cross-section of potential buyers.
Fine home auctioneer and licensed real estate broker Rick Levin of Rick Levin & Associates Inc. has found a way around this. He uses auctions as a way to draw a larger pool of qualified buyers from around the world and quickly move luxury properties languishing on the market, and offers free consultations on this topic for brokers and sellers. Chicago Agent recently caught up with Levin to find out how it works.
Chicago Agent magazine: What do you do when high-end clients feel that an auction brings with it some negative connotations, or makes it seem like a distressed property?
Rick Levin: If you think of it, an auction is the normal way to sell a farm. But when it comes to a house, if you say real estate auction, it’s still sometimes synonymous with distressed properties, which shouldn’t be the case. We sell art and jewelry that way — why not beautiful homes too?
CA: How do you determine a property’s value?
Levin: Just like selling a home the traditional way, a property’s value is determined by how much money buyers are willing to pay for it. But the difference is, sellers can set a minimum bid that they won’t go below.
CA: How does this work with an agent’s commission?
Levin: Selling a property at auction does not take away from a broker’s commission. Rick Levin & Associates collects a fee from the seller to market the property and an add-on charge from the buyer for its services.
CA: What is the process like?
Levin: First, the firm meets with the broker to develop rapport, assure them they maintain control of the transaction and share success stories. Next, RLA, the broker and seller create a plan, set an auction date, and draft a purchase agreement to be preapproved by the seller and their attorney before the auction.
CA: What kind of marketing do you do?
Levin: To generate excitement and heighten competition, the auction is promoted in targeted ads for three weeks before anyone can see it at an open house. After 45 days of heavy marketing, auction day arrives. Brokers choose which type of auction to hold based on the seller’s needs, since terms and conditions vary. Fast and effective, real estate auctions are a proven strategy worth exploring.