Real Estate Auctions 101: Laura Brady Explains the Concierge Buyer’s Premium

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3808 Turtle Creek FrontWith 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?

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Candy Evans

A real estate muckraker, Candy Evans is one of the nation’s leading real estate reporters. She is also the North Texas real estate editor for Forbes.com, CultureMap Dallas, Modern Luxury Dallas, & the Katy Trail Weekly. Candy has written for Joel Kotkin’s The New Geography, Inman Real Estate News, plus a host of national sites. Constantly breaking celebrity real estate news, she scooped former president George W. Bush's Dallas home in 2008. She is the founder and publisher of her signature CandysDirt.com, and SecondShelters.com, devoted to the vacation home market. Her verticals have won many awards, including Best Blog by the venerable National Association of Real Estate Editors, one of the nation’s oldest and most prestigious journalism associations. Candy holds an active Texas real estate license but does not sell. She is on the Board of Directors of Braemar Hotels & Resorts (BHR).

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