There are some things that don’t age well, and a “For Sale” sign is one of them.

“Days on market are not your friend,” said Laura Brady, founder and president of Concierge Auctions. “It’s like U.V. rays from the sun: The longer you’re out there, the more you’re getting burned.”

The number of days on the market is the first sign that it may be time to go the auction route.

Auctions create urgency around a sale, as well as get the word out to a new pool of potential buyers. This is especially true for high-end and unique homes, which have such a small pool of potential buyers in the first place.

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If a home has been listed for two or three times longer than the average number of days on market, it’s time to consider the auction route, according to Trayor Lesnock, president of Miami-based Platinum Luxury Auctions.

“Then it’s time to think outside the box about another way to sell that property,” he said.

The number of days on the market depends on the location of that market; each city or town is different. The median age of properties across the U.S. in June 2018 was 54 days, which is six days fewer than the previous June and one day fewer than May 2018, according to Realtor.com.

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For ‘One-of-a-Kind Properties’

Another reason to put the property up for auction is if the home is hard to classify and, therefore, difficult to price accurately. A truly unique home is unlikely to have comparables, or “comps,” which help guide pricing.

“A seller should consider an auction if they have a very one-of-a-kind property, or one that has a small pool of potential buyers,” Ms. Brady said.

The auction process can expand that pool with its marketing strategy, getting the information out to clients around the world and creating a sense of urgency around the sale.

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“It has become obvious that once the word ‘auction’ is introduced to the marketing message, it creates a new level of interest for the property,” said Ric Souto of Slifer Smith & Frampton Real Estate, who is the listing agent for the Vail property now being auctioned by Concierge. The property was originally listed on July 9, 2015 for $7.425 million and no offers have been made to-date.

This contemporary mountain home was previously listed for $5.699 million. Bidding will be open August
This contemporary mountain home was previously listed for $5.699 million. Bidding will be open August 6th to 9th and will be held via Concierge Auctions’s online marketplace.
Concierge Auctions

When You’re Unsure of the Home’s Potential Value

These unique homes can be hard to price from the onset, experts said. Comparable sale prices—or comps—may not be available if the property in question is truly one of a kind. And “it usually takes a longer time for those homes to sell,” Mr. Lesnock said.

Often, a seller may have high hopes of what their beloved, hand-crafted home is worth, but that isn’t necessarily what a buyer will pay. In the traditional model, a home that has been on the market for any length of time would probably get a price cut, which is something buyers don’t necessarily want to see.

On the flip side, if there’s a lot of interest in a property, the traditional sales model may not push prices high enough.

“There are barriers around the maximum value when you do have a lot of interest,” Ms. Brady said. That’s because brokers tendtheake early offers, and someone who may be willing to pay more may not have had a chance to put in an offer. In a healthy market where homes sell quickly, potential buyers may not have even had a chance to see the a home before it’s sold.

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With an auction, everyone comes to the table at the same time and “compete against each other,” she said.

The auction allows buyers to determine what the property is worth in real time, agreed Randy Haddaway, the founder and CEO of Elite Auctions, based in Naples, Florida. And it creates a fear of missing out among buyers, he said, which can fuel interest and, ideally, higher bidding.

Another reason a seller may opt for an auction is because he or she has an investment opportunity and needs cash, but a substantial amount of it is locked in a property.

“Some sellers are looking to reallocate capital quickly so they can move on to their next venture,” Ms. Brady said.

This custom home built for golf pro and commentator Mark Lye in Naples, Florida, will head to the auc
This custom home built for golf pro and commentator Mark Lye in Naples, Florida, will head to the auction block August 18th.Elite Auctions is managing the sale with no reserve price.
Elite Auctions

You Have a Hard Deadline to Sell

For a seller with that kind of deadline, or who just wants to move on, an auction is a good bet, Mr. Lesnock agreed.

“It gives the seller certainty,” he said. The deal is also as-is, so there are no or few contingencies that could stall the progress. Most auctions are completed in 30 to 60 days, and are generally done in cash.

Although there are more auction companies getting into the game, according to Mr. Lesnock, it’s still not the preferred way of doing business in the U.S. (Some countries, like Australia, have long-used the auction model as the preferred way to sell a home).

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There’s still a stigma for some sellers about auctions and that only homes in foreclosure or another kind of distress are headed for the auction block. And some traditional brokers, like Dolly Lenz of New York City-based Dolly Lenz Real Estate, say sellers should be wary of auction houses that don’t provide transparency about marketing strategies and due diligence to their clients.

But auction companies have seen more sellers put their homes to the auction block in recent years, and more homes are skipping the traditional sales route and going straight to auction.

A riverfront mansion in Fort Myers, Florida, sold at an Elite auction in April for $4.7 million, a record price for that county, according to Mr. Haddaway.

“It had never been on the market before, and the sellers were just ready to move on,” he said.

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Mr. Lesnock said about 5% of Platinum’s auctions are being offered for the first time, and Ms. Brady said it’s more like 20% for Concierge. Sellers have often worked with the companies before, and know that certainty and a fast sale are part of the package.

“A lot of people think, ‘oh we don’t need an auction, we have a healthy market,’” Ms. Brady said. “They don’t realize they can be powerful tool in any market.”

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