With another real estate auction coming to Dallas, Texas as the incredible Les Jardins estate designed by Anton F. Korn Jr. is slated to be sold to the highest bidder on April 24, I thought we might want to better understand the real estate auction process. The question arises, who pays for the auction expenses and the agent commissions? I found this great video of Concierge Auction president Laura Brady from Inman Real Estate Connect this past January. As you know, Les Jardins at 3808 Turtle Creek, is listed by Keith Conlon of the Matthews-Nichols group at Allie Beth Allman. The property will be auctioned by Concierge Auctions of New York City, New York, on April 24. In this video, Laura does an excellent job of explaining how Concierge nets an income from the auction process and markets through permission-based marketing. Concierge also charges a buyer’s premium to the winning bidder, which is 10% of the high bid amount. So on, for example, a $5 million dollar home, that could be half a million dollars. But Concierge only charges the premium on the high bid amount less the opening bid. This way, the auction gets an opening bid with each registration, and bidders are incentivized to toss out an opening bid. The higher the bid, the smaller your buyer’s reserve. So if the house sells for $500,000,000, the buyer’s premium is $5,000,000 less the winning bidder’s opening bid. If that opening bid was $3 million, they pay 10% on $2 million or a measly $200,000.
Capiche?
