Transacting real estate can be a stressful experience.
How much should you price your property at? How much should you offer? Is that first offer really the best offer possible—in other words, has the market been sufficiently exposed to your offer and have potential buyers been given sufficient time to compete for it?
The auction method is employed to sell fine art, unique jewelry, collectable automobiles and racehorses—all sought-after, big-ticket items that are potentially difficult to price. Harcourts CEO, Hayden Duncan, suggests we should be treating real estate the same way.
After all, he points out, in the current Vancouver market, real estate is in greater demand—and is arguably more difficult to price—then a car or a horse.
“The expectation that everything sells above asking price is frustrating for buyers,” says Duncan. “Really, it just turns negotiation into a blind auction with no transparency.”
Harcourts do not endeavor to ‘get rid of’ the traditional real estate process, Duncan says. In fact, they still complete over 50% of their real estate transactions via non-auction methods. “But Harcourts also sells properties via the auction process, a proven and tested alternative to the traditional real estate negotiation practice.”
Auction is not a new concept—and it’s certainly not a new concept to Harcourts. Founded in 1888, Harcourts started as a real estate auction house. Over a century later, they’re still employing the same approach for a significant part of their business.
Harcourts sold over $32 billion dollars worth of real estate last year including over 12,000 trasactions of non-distressed real estate by auction.
“With auctions, sellers don’t have to face the nerve racking experience of pricing their home,” says Duncan. “Instead, they’re able to use the auction process to discover the highest price the market is willing to pay. The process results in a negotiation up instead of a negotiation down.”
According to Duncan, the following terms apply to all Harcourts auction properties:
- No Buyer Premium
- Full commission sharing to co-operating broker
- Full disclosure to Buyers
- Ability to purchase prior to auction
- A professional environment to conduct auctions.