Seller of high priced Aquinnah house goes the auction route
Photo courtesy of Rubenstein Public Relations
An Aquinnah house with water views goes on the auction block next week. The sale is not connected to a distressed or foreclosed property, but is part of a growing trend to match high-end buyers and sellers, to move luxury properties from Maine to California and overseas.
An opening bid of $1.25 million is required to bid on the 3,000 square foot, four-bedroom house on 3.6 acres overlooking Vineyard Sound, according to Concierge Auctions, a New York City company which specializes in marketing and auctioning high-end houses. Five to 15 potential buyers are expected to bid next week in an online auction to own a luxury home in Aquinnah.
The house, at 9 Clay Pit Road, is being sold by owner Karen Duffy. Ms. Duffy paid $1.8 million for the house in 2002, according to Aquinnah town assessor records.
The property has been on the market for less than a year and has been listed with an asking price of $3.25 million, according to information at Flanders Up-Island Realty in Chilmark.
Julie Flanders of Flanders Up-Island Realty is the commission broker on the sale. Concierge Auctions is not a realty company but receives a 10 per cent fee for its services. Ms Flanders said this week that the high-end auction is the first of this type that she has seen on the Island. "I'm taking it all in," she said.
"Honestly, I was a little reluctant when the clients brought the idea up, partly because it's new and different and also because I was concerned that buyers wouldn't be able to do their homework well," she said. "The Island is a different market. We have quitclaim deeds here, everything works off a permit process and we have very specific zoning bylaws. We all have different selling styles. For me as a broker, those are the things I need to think about.
"But I wanted to know about auctions. I didn't want to miss out on the opportunity to see if it works here. I didn't know what to expect but I'm impressed at this point. Concierge has been a good partner, good follow-through and communication."
Asked if auctions would become a trend on Martha's Vineyard she expressed uncertainty. "We just don't know enough to determine that now. Call me after the auction, we'll all be a lot smarter then," Ms. Flanders said.
Concierge is one of a handful of companies specializing in high-end auctioning. One Malibu, California estate went for an opening bid of a million recently, much less than it had been on the market, according to Bloomberg News service. Bloomberg and other sources say discounts of 40 to 50 per cent from asking prices are common.
In six and one-half years, Concierge has participated in more than 500 sales of properties between $1 million and $20 million in value, company ceo George Graham told The Times in a telephone interview this week. The company has facilitated more than $2 billion in high-end home sales, he said.
"We conduct live auctions and online auctions, and the Aquinnah property will be conducted as an online auction," he said. His company has developed an auction process which requires buyers to be "vetted" or qualified to bid by the company, which has a database of 10,000 qualified prospective high-end buyers.
Potential bidders are free to tour the property during the bidding period, in this case, between Sept. 9 and the Sept.16 bid deadline.
Bidders are allowed one bid and are required to wire or deposit 10 per cent of the bid as "earnest" money, which is applied to the purchase price or returned if the bidder is unsuccessful. The sum is forfeit if the buyer defaults. "I've never had a buyer default," Mr. Graham said. The sale is required to be completed within 30 days. All the documents related to a specific sale, including a purchase and sale agreement prepared by the seller, are linked to the property description at conciergeauctions.com.
The value to sellers is a hassle-free, speedy process involving enough bidders to determine the current market value of the property, Mr. Graham said.
"Our process complements the traditional real estate selling process, and we want to make the sale of luxury properties at auction the norm. Almost all the sellers are not distressed. They want to sell at market value and move on," he said, noting that carrying costs, such as maintenance, repair, and taxes, can be a substantial sale motivator.
According to terms of the auction, the buyer with the highest one-time bid wins and has 30 days to complete the sale.
"Typically the properties have been on the market between six months and three years, and our experience is that they average three or four showings in that period. But we generate 75 to 100 potential buyers coming through during the four-week marketing and auction period. Five to fifteen of them usually become bidders.
"This (Aquinnah) property will generate dozens of inquiries. I can't tell you what the selling price will be, but I can guarantee it will reflect the true market value of the home," he said.
He said sellers like the speedy sales process. "Today, signing the purchase and sales agreement is really the beginning of the negotiating process in many real estate transactions, with inspection and financing contingencies and the like. We offer the certainty of closing, there are no contingencies," he said.