Sotheby’s Concierge Auctions accelerates the way luxury properties are bought and sold
This property in Lake Sherwood, California, sold at Sotheby’s Concierge Auctions for US$12,656,000 in 2022 (Sotheby’s International Realty – Westlake Village Brokerage)
Some have probably never considered the possibility of selling their luxury real estate at auction. They may not even be aware that such an option exists, and could even be forgiven for thinking a property auction is not something one chooses but is forced to turn to following financial hardship. They would likely be surprised to learn that the average price for the top 10 properties sold through Sotheby’s Concierge Auctions in 2023 was US$18.2 million. The year before, it was US$20.3 million.
“It’s a great way to arrive at market value,” says Chad Roffers, founder and chief executive officer at Sotheby’s Concierge Auctions. A case in point is the Southampton, New York property La Dune, which sold at auction for US$88.48 million in March 2024. The historic estate on Gin Lane was once the most expensive listing in the Hamptons.
The first property to be sold live alongside art at Sotheby’s, La Dune received bids from seven individuals based in New York, Connecticut, Georgia and the Caribbean, competing in the room and via telephone. A single buyer eventually secured the full property for more than twice his opening bid.
Highly revered as one of the most iconic estates in the Hamptons, La Dune sold at auction for US$88.48 million (Sotheby’s International Realty – Southampton Brokerage)
“The buyer pool for luxury properties is small, so for sellers who want to move quickly, the auction route allows them to sell a property—anywhere in the world—in just six weeks,” says Philip A. White Jr., president and chief executive officer at Sotheby’s International Realty. “Using this approach, we can target buyers who have the means and interest in luxury properties.”
As part of the auction process, over a period of 60 days, Sotheby’s Concierge Auctions usually fields nearly 500 inquiries per home listed for auction. This number is quickly winnowed down, and after 25–50 in-person visits to the property, each lot ends up with five to seven bidders.
The Newton Baker House in Washington D.C., previously owned by Jacqueline Kennedy Onassis, was auctioned by Sotheby’s Concierge Auctions in 2023 (TTR Sotheby’s International Realty)
According to Frank Aazami, real estate associate, Russ Lyon Sotheby’s International Realty, the Sotheby’s Concierge Auctions platform “expands the buyer pool for our sellers,” and that when it comes to managing a diverse portfolio of luxury properties around the world, “expediency is crucial.” Aazami adds that the auction format “allows us to move through the process efficiently.” In September, his firm is collaborating with Sotheby’s Concierge Auctions to offer a significant guard-gated residence in the exclusive Saguaro Forest Community of Desert Mountain, in Scottsdale, Arizona.
Sotheby’s Concierge Auctions bidders can browse properties and mentally picture the lifestyle they might pursue there. “Maybe they want to spend time in a warm place on the beach, or maybe they want to buy in a city with all the attendant museums and culture. They are constantly on the lookout for unique situations,” Roffers says. “We auction exceptional properties in interesting communities. Moreover, buyers get the opportunity to pay a truly market-driven price.”
This home is majestically perched in one of the most exclusive neighborhoods in Palos Verdes Estates, California (Vista Sotheby’s International Realty)
Roffers estimates that three out of 10 bidders have not seen the property they are bidding on. They might have sent a representative to examine it before the auction but have not necessarily stepped through the front door until move-in day.
Most of the company’s auctions take place online, but there have also been live components at the headquarters of Sotheby’s auction house in New York, London and Hong Kong, which is exciting to witness. “I remember one person was there in the room and she had her paddle raised the whole time,” Roffers says. “She was on the gas out of the gate and didn’t stop until she won.”
The spectacle of the auction room has been known to give rise to a competitive spirit among potential buyers. For example, according to a 2022 study of bidding behavior at housing auctions in Norway, shared by the American Economic Association, researchers found that “competition is associated with higher sale prices, shorter bid deadlines, shorter intervals between subsequent bids, smaller bid increments, shorter time-on-market, and a higher sell-ask spread. Moreover, bidders who are unsuccessful in earlier auctions tend to increase their maximum bid as the number of unsuccessful attempts increases.”
Read the full version of this story in the Mid-Year Luxury Outlook Report 2024
