At Harcourts Milestone Advisors, we’re not big on cookie-cutter solutions. Instead, we’re here to find out what you’re looking to achieve on your unique real estate journey and provide you with the best possible outcome – whether that’s buying or selling through the traditional listing method or through a Harcourts Auction. While traditionally, real estate auctions in the United States have been associated with distressed properties, the CEO of Harcourts North America Ben Brady transformed that perception when he established Harcourts Auctions in California a decade ago.
As the CEO of the fastest-growing real estate company in the nation, Brady has participated in thousands of auctions and created an auction structure for dedicated and driven real estate professionals like Kara Welliver and Ron Hoefer of Harcourts Milestone Advisors. We sat down with Ben Brady to gain more insight on the auction model, process and benefits about how Harcourts Auctions work for both buyers and sellers, and why auctions are an undeniable asset in today’s economic environment.
The Auction Advantage: A New Perspective on Real Estate
Watch the video below to learn all about Harcourts Auctions.
Real estate auctions, often misconstrued as a last resort, are in fact a strategic powerhouse in the property market. The way a Harcourts Auction works is that the property is listed on the MLS (multiple listing service), Harcourts Auction website and all public websites (i.e. Zillow, Redfin, Trulia) at a very attractive price with the intent to quickly generate significant buyer interest. This initial list price is lower than what the property may actually be worth or what the seller desires to achieve in order to draw maximum attention to the property itself. Unlike a traditional sale where a significant portion of the necessary due diligence is completed after escrow is opened (which can lead to burdensome delays or even cancellations), with a live auction all buyer and seller due diligence is completed prior to auction, including disclosures, reports, inspections and loan pre-approvals.
Another difference from traditional real estate transactions is that in an auction there is a set date for the auction to occur, which gives buyers and sellers a clear and transparent timeline of what to expect. In addition, motivated buyers can submit offers before the property goes to auction, with the intent to encourage the seller to accept their auction-stopping offer so as to avoid the competitive nature of the Live Auction.
When Live Auctions occur, the auctioneer plays a pivotal role. As Brady points out, “The auctioneer keeps the bidding moving and ensures adherence to rules.” At Harcourts Milestone Advisors, this expertise translates into a seamless auction experience, where every client feels informed, supported, and valued. While Harcourts Auctions are a straight-forward process with clear timelines set and guidance by a professional team, it is a process nonetheless. The time spent on both buyers and sellers sides helps keep only serious inquiries on the table and decreases the likelihood that deals will fall out of escrow.
A Recent Auction Example: Receiving $150,000 More During Live Bidding
As a pioneer in the auction space, Brady shared the biggest advantage of auctions, stating, “The auction process is not just about getting the highest bid. It’s about finding the fair market value and ensuring the best deal.” In our conversation, Brady recalled a recent auction transaction for a multi-family property that validated this perception. Here’s what happened: The property went up for sale and received multiple offers prior to the Live Auction. Buyers were asked if they were satisfied with their offers and if they wanted to put in a final offer for their chance to stop the property from going to Live Auction. Prior to Auction Day, $850,000 was the highest offer received. As a result, the seller decided to take the property to auction, where bidders were able to see what others were offering. The final bid was $1,000,000!
“Before the live auction, potential buyers had said that their pre-auction offers were their absolute highest and best offer,” Brady said. “Yet, by leveraging the competition in an auction and creating an absolutely transparent bidding process, the best outcome for the buyer was achieved because they knew that they had paid current market value and for the seller because they knew that they received the best market value at that particular moment in time.”
Why Real Estate Auctions are an Asset to Buyers
Just the word “auction” causes people’s ears to perk up and sparks immediate interest. Unlike traditional sales, one benefit of an auction for the buyer is that there’s a set auction date. This eliminates the human tendency to be indecisive, drives action and keeps the process moving forward on a clear path.
Another buyer benefit is that full disclosure is given up front with all reports, paperwork and everything that usually happens in escrow completed ahead of time. With his knowledge of real estate, Brady shares, “For a buyer, auction is my personal top choice because it creates social validation and a different level of certainty on a buyer’s investment than what’s seen in traditional real estate sales. I would rather see what other people are bidding to know where everything stands and then I would want the final chance (to bid). Many times with auctions I’ve had the best bidder come in right at the end when everybody else has depleted their bids.”
Why Real Estate Auctions are an Asset to Sellers
Selling through a Harcourts Auction provides the seller with a clear timeline of when the property will be scheduled for a Live Auction Event. The set timeframes for auction keep the property’s reputation intact by avoiding it being left on the market unsold for a long period of time.
“In a traditional real estate listing, the price placed on the property is usually indicative of an aspirational price from the seller’s perspective,” Brady explains. “The best property in the world can remain unsold based on that approach to pricing alone. With auction, we move the initial conversation away from price … and give a set timeframe for the buyer to make a decision and submit a competitive bid.”
The true benefit of a Harcourts Auction for a seller is the leverage that it brings. For example, if a buyer is interested in the property enough to want to prevent it from going to auction, they’re going to need to put a serious offer in. The seller can then consider that offer before the Live Auction with more leverage than they’d usually have in a traditional format. In the end, sellers are given a clear view of how much their property is actually worth to potential buyers at that moment in time.
Finding a Real Estate Professional Who Makes the Process About You
At Harcourts Milestone Advisors, we’ve witnessed the benefits that auctions offer to buyers and sellers, and find that it’s an effective, unique option. Here’s an example of how our clients Sherry and Christie were able to purchase their dream vacation rental using the money they received from selling some of their other properties through a Harcourts Live Auction.
“We decided that using Harcourts Live Auction was a unique method to drive traffic to the homes which needed to be sold quickly, and we received multiple offers! We even set a new sales record in the Faire Harbour community! With Kara’s guidance and support, we were able to then acquire our dream property that is now ours to use, rent and share with family and friends,” Sherry and Christie shared.
Ten years ago, Ben Brady used his real estate expertise to create a different way of buying and selling real estate in North America with the Harcourts Auction platform, built on the philosophy that “It’s all about people.” Today we at Harcourts Milestone Advisors run on the motto that “It’s All About YOU,” and work to make all of clients’ real estate dreams come true with our innovative, personalized services. Whether you’re a buyer or seller, we’re here to share our insights on Harcourts Auctions to see if a real estate auction is the right fit for you.
As our client Erin shared, “The auction is a differentiator. It’s a different way to do things. We need those innovators and disruptors, especially in the real estate market. In fact, when we sold our previous home via auction, our selling price was $138,000 more than the average selling price for our model in our neighborhood!”
Are you ready to try a different approach to real estate? Let’s have a conversation about what you’re looking for today. We’re always just a call away: contact us to get started!