In my work in business development at Concierge Auctions in New York, I have participated in many real estate auctions for luxury properties. What follows are a few facts to help you understand this type of selling.

Like antique and art auctions, a real estate auction typically uses the familiar open-outcry method to signal the auctioneer. The auction is held on the property, such as a luxury estate. People who cannot attend the event in person can take part by phone, online, or through a proxy.

The auction firm checks prospective buyers for financial fitness to meet the expected bid range. The firm consults with bankers to confirm the winning bidder has the funds necessary to ensure a timely closing, typically 30 days or less.

Concierge Auctions generally sets a buyer premium, which is added to the highest bid as either a set percentage or a specified value.

About the author: Before he signed on at Concierge Auctions, Chad Roffers was the president and co-founder of SKY Sotheby’s International Realty, which during his tenure made some $500 million in luxury real estate sales.

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