This property in Northwest Dallas is up for auction via Hubzu.com.

This property in Northwest Dallas is up for auction via Hubzu.com.

Let’s say you’re one of the buyers vying for the mid-century home at 3631 Seguin Dr. in Northwest Dallas. This is a super-hot market, and you don’t want to miss out on bank-owned deals that can net you a pretty penny if flipped. But in most auctions you’d have to have cash on hand, ready to pay up right after you win. You’re not an institutional investor, though, and ponying up $88,000 in a matter of hours may not be an option. However, with Hubzu.com’s new buyer’s financing contingency option, you can bid on the property and secure financing after you win.

“Since 2009, institutional investors and sellers have found tremendous value using Hubzu to auction and buy homes,” said Steve Udelson, President of Altisource Online Real Estate. “Now consumers, who seek an affordable auction property but need to secure financing if they win an auction, can use Hubzu just as easily as investors who already have financing in place or pay cash. This enhancement continues to demonstrate that Hubzu is a great marketplace to transact for all qualified buyers.”

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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?

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?

I have been on pins and needles waiting out this auction, bugging Robbie Briggs and Laura Brady at Concierge Actions all day yesterday. At about eight p.m. last night Robbie Briggs emailed me that “It was a fascinating process, and it appears to be successful.” Today I heard from Laura Brady who said — “we haven’t released details to anyone… the high bidder has formally requested confidentiality about their name and the high bid amount.” Which means the house did sell, we just don’t know for how much and who it sold to.

Great news!

Refresher: the 48,000-square-foot Hickory Creek mansion, known as Champ d’Or, which translates to “Fields of Gold,” was put up for auction by Concierge Auctions out of New York Friday, March 30 with a minimum reserve bid of $10.3 million. Champ d’Or cost about $46 million, took five years to build, and has been sitting on the market for umpteen years. Last market listing was $35 million and at least five local brokers have attempted to shed the house. The Denton County mansion was last appraised for tax purposes at $9.72 million, according to the Denton County Appraisal District. Champ d’Or was modeled after Vaux-le-Vicomte chateau in Paris.

Reading between the lines, I’m wondering if there was a confidentiality clause signed.

I have so many questions: how many bidders were there? Did they meet the reserve? Did they go into private negotiations? Were the bidders actually there? In most auctions, experts tell me they show up 75% of the time, unlike luxury auto auctions. They like to see the process and what they are buying. Sometimes buyers do send their brokers or POA reps.

I asked a veteran local real estate auction expert (who asked to remain confidential) to speculate on a couple of scenarios and tell me what HE THOUGHT went down. Speculation here, folks. What if, I asked, they didn’t meet the reserve yesterday? Let’s say they stalled out at 7 million, he said, you know everyone is staring at each other, they just thank everyone for participating and end the auction. They may take the top bidders aside, say hey we didn’t make the reserve, what are you interested in putting into this property? In other words,  private negotiations begin.

“Pending contract” could mean they are still trying to work out a contract, they didn’t make the reserve and are still negotiating. “Sale pending” may have indicated they made the reserve.

Now let’s say it sold at auction, met the reserve, bingo. Typically, there are no contingencies. If they negotiated privately, the buyer may have said I want to bring in my own inspectors,  etc., which any realtor knows just opens up the door for guess what: more negotiations.

The sprawling estate was drawing widespread interest from buyers across the U.S. and internationally, Laura Brady, vice president of marketing for Concierge Auctions, told the Dallas Morning News’s James Ragland. I know that, because even people from Japan who had seen it on my blog were emailing me about it. A refundable $250,000 cashier’s check was required to register, the number of bidders was confidential. James asked Laura some great questions:

Potential buyers were expressing interest in pursuing “the property for residential purposes, which is how it’s used now,” as well as possibly using it for a business headquarters, she said. Brady said developers also had designs on the property, which is about 40 miles north of Dallas.

 

 

 

 

 

 

 

 

 

OK, something’s not right here: This Lake Travis home is located on 13.6 acres with 1,100′ of frontage along a deep water peninsula in Lake Travis. The 11,925 square foot gigantic spread has 7 bedrooms, 10 bathrooms, 2 private guest residences, a spa, a waterfall, a massage room, a sauna and a 1,200-bottle wine room/cellar, not to mention garages for 8 cars plus exquisitely landscaped grounds! The manse was priced at $10.8, bidding started at $1.9, and the place sold for $3.3. Such a deal or…was the property way overpriced to begin with?

Do you get good deals from a real estate auction? I know people who have made a C note or ten on auction properties. Soon, I’ll be talking to Pat Kirby of Grand Estates Auction who has a most interesting story!

Robbie Briggs is in Hong Kong, where he recently attended a Sotheby’s real estate auction and has the latest on what real estate the world is buying, here in Dallas, and globally. Recall that Robbie and his family know the Far East as well as they know Lovers Lane because they lived in Beijing, China for almost three years. He even has two grandchildren there. Robbie was one of the few real estate execs in Dallas who foresaw global when the rest of us were scratching our heads over growth in Fairview and Allen, Tx. Briggs Freeman is now part of Sotheby’s International, and I emailed him for the scoop:

CD: Are people in Hong Kong and China really buying US real estate?

RB: Yes, they are!

CD: Where else are they shopping (who’s our competition)? 

RB: London, France, Canada and Thailand, to name a few. 

CD: What are they saying about us — dying to know!

RB: They still still love the US.

CD: Do they think the entire U.S. is on a fire sale?

RB: I don’t think so, however our prices do seem reasonable compared to what they see in Shanghai, Beijing or Hong Kong. 

CD: I’ll bet. I recall a friend leasing an apartment in Tokyo for $50,000 a month ten years ago! Are they really buying Texas ranches?

RB: They have a fascination with ranches. I have talked to several Chinese that are enamored with land and improvements. It’s something they just can’t have elsewhere. 

CD: I met a lot of people from Hong Kong at Pebble Beach Concours and they all marvel at how large our homes in Texas are — are you hearing that? 

RB: Oh yes, square footage and land.

CD: What do they like about Texas real estate in particular?

RB: Space, quality of construction and the land. 

CD: Is there anything we can learn from Hong Kong real estate?

RB: We are a global market. 

CD: By the way, how is their market?

RB: Hong Kong is not as crazy as it once was, but if the success of the Sotheby’s  auction is any indication of their interest in spending, then we will continue to see the Chinese in our markets.