There are ways to prevent luxury real estate from going stale…
It’s not often that luxury real estate gets compared to food. They don’t seem to have much in common. One’s for shelter and the other is for sustenance. The biggest difference is price. After all, the check from New York’s three-star Michelin rated Le Bernardin is unlikely to run over $1,000 – wine excluded – even with dollops of Caviar at $145 an ounce. That might not buy you a bathroom faucet at a luxury estate, never mind the entire price of the home.
However, the two do have something very important in common. Like a fine French pastry, a house can go stale if left out too long.
Real estate professionals argue over when, exactly, a property becomes stale. Unlike food, where the taste, texture and smell tells you when something is off, real estate is more subjective.
What’s Too Long on Market?
Like food, different types of real estate go stale at different times. In 2018, the average Days on Market (DOM) in the U.S. was 68 days, according to Zillow. A 180 DOM is generally considered the time when a home has gone stale. Just like stale food that’s heading for the discount bin, the price of stale homes goes for less too research shows.
High priced real estate is cut some slack – but not much – on the DOM countdown. Luxury properties typically take longer to sell because of their high price and the fact that the buyer market being so small. Luxury real estate also takes a bigger hit on price the longer they stay on the market vs. the average home.
What’s Wrong with that House?
Buyers start to suspect that there is something wrong with a property if it is on the market too long. That could mean several things. It must be over-priced. Or perhaps it has a weird floor plan. Maybe it is simply a “lemon”. After all, other buyers have rejected that place, so something must be wrong with it. No broker wants buyers to think of their listing in these terms.
When luxury properties linger, brokers typically cut the price until someone, anyone, buys the place. Others have a public auction which, in many cases, casts a shadow over the property because most people associate public auctions with distressed properties banks are trying to quickly unload.
While auctions aren’t necessarily for properties that are distressed, the buying public thinks they are. However, under the right circumstances, a property auction is the best way of avoiding having a property go stale.
How to Avoid Having a Luxury Property on the Market Past its “Sell-By” Date.
There is a way to sell a property before it starts to go stale that doesn’t require a price cut. In fact, odds are, if this method is used, brokers will be able to sell luxury properties faster and for a higher price. That’s because of the way they are listed, and, importantly, who has access to the listings.
A private broker-to-broker online auction platform solves the “going stale” problem. It’s also helps maintain the home’s asking price, and here’s why.
A global off-market platform where only “members” – brokers who have a track record of selling numerous luxury homes – have access. This is NOT a public auction block or MLS. Because it’s a closed marketplace with brokers who bring large pools of qualified buyers, the odds of selling quickly and for a higher price, are dramatically increased.
Like Selling Picasso’s and Van Gogh’s
Think of it as a high-end art auction where only people who qualify – a.k.a. can afford – these multi-million dollar works are allowed in. It’s like a Sotheby’s art auction except without the cameras (which, by the way, are only there to generate publicity for the auction house, not to gin up buyer demand). Only those with deep pockets and a passion for art are given a bidding paddle and are permitted to sit in the audience. That’s exactly what a private, off-market auction platform for the luxury real estate market.
By coupling the speed of the auction, with technology and a closed, select audience of participants, this method prevents luxury properties from lingering on the market, slowly losing their value. If its good enough for Picasso it’s good enough for your client’s luxury estates.
A private, off-market auction platform such as Primextate will, like a tightly sealed ZipLock bag, prevent luxury properties from going stale and losing value.
Think of it this way; selling luxury properties through Primextate is like eating a fine French pastry at the peak of its freshness, right out of the oven. No one wants to buy a stale croissant. And no broker wants a stale listing.