Joshua Just’s Real Estate Roundup: Pawning Your Property

Every week in my real estate roundup, I’ll comment on a popular real estate article in the news. This time I am weighing in a luxury home market trend before its going, going, gone.

According to a CNN article this week, sales at residential real estate auctions grew by more than 47% from 2003 to 2008. What’s interesting is these aren’t the typically distressed sellers you would think of when you imaging someone sending their house to the chopping block. No, the trending seems to be geared toward homes in the $1 to $10 million range, and these are exclusive communities that find the no-hassle approach of residential real estate auctions in tune with their lifestyle. It seems that the old adage “time is money” is especially true for those who have it. From the article:

“An increasing number of luxury homeowners [are] choosing to forgo the traditional Multiple Listing Service, months of walk-throughs and back-and-forth deals with real estate agents, instead letting an auction house do all the work in selling their homes…Corcoran calls luxury absolute auctions a “more highbrow version” of the bidding that used to be done on the steps of courthouses.”

The pluses here are obvious. Fine arts auctions as well as ecommerce sites like Ebay have taken away much of the stigma associated with auctioning off your possessions. And for a busy hedge fund manager or executive, the residential real estate auction’s aggressive marketing approach, including online campaign and outdoor advertising,  offer an attractive, convenient solution if they’re looking to unload a property (or two) in a timely manner.

Who might this approach not work for? Well for starters, there are some properties that really would be served better with a traditional open house or walk through. These include modest homes, or those with unique or compelling factors (a great neighborhood, architectural touches, or a beautifully curated garden) that perhaps don’t come across well on paper but immediately enhance the charm upon a personal visit. Likewise, unless a seller is completely open to offer some aggressive pricing for their house, there may be potential disappointments in the final auction price.

The Joshua Just Blog is written by Joshua Just, CEO and Founder of Diversified Investments. An experienced leader in the market place, Joshua Just has founded several successful firms in the areas of real estate, aviation, litigation & financial management.

Photo: Courtesy of Charlotte Luxury Homes;

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