Compass Teams Up with Auction Experts for a New Era in Luxury Real Estate
Compass Luxury X Paramount Realty USA & DeCaro Auctions International
Compass is proud to introduce a cutting-edge affiliate referral program with two industry titans, Paramount Realty USA and DeCaro Auctions International. In this exclusive Q&A with both auction houses, we discuss the unique advantages of our auction-brokerage collaboration for selling luxury homes, property categories that benefit most from this approach, and how this referral program offers clients innovative options to maximize value and efficiency.
“Some properties, locations and markets can lack an active market, and combining an auction option with regular brokerage marketing can be an effective way to deliver additional exposure and instill the one thing that delivers results: urgency. When buyers know there is a cutoff date, they are often more incentivized to reveal their interest and pricing knowing there can only be one buyer.” - Leonard Steinberg
“With over 38 years of real estate experience, I'm always seeking new ways to add value for my clients. Introducing auction options has piqued their interest and sets me apart from other agents. Offering three types of options gives me a unique advantage and demonstrates my commitment to providing tailored solutions for my clients.” - Marc Lotzof
Why opt for auctioning a luxury home as opposed to traditional methods?
Paramount Realty USA | Much like art, rare jewelry, and antiques, treating luxury properties as unique pieces of art through the auction process offers distinct advantages over traditional sales methods. Auctions generate buyer urgency, maximizing value promptly and can be particularly effective for properties on the market for an extended period, breathing new life into listings. Comprehensive auction campaigns, coupled with a skilled listing broker, provide enhanced exposure. The compelling messaging in an auction, showcasing specifics like a reserve price, elevates interest and generates more traffic, offers, and clarity for the seller regarding the maximum value achieved. The synergy of increased exposure and a compelling message ensures a robust auction process. For further details, refer to pages 12-13.
DeCaro Auctions International | Auctioning a luxury trophy home provides sellers with control and efficiency, allowing them to set a specific sale and closing date with no contingencies and close within 30 days.
For luxury real estate agents, what unique benefits come with auctioning a property?
DeCaro Auctions International | When luxury real estate agents partner with DeCaro Auctions International to sell their luxury trophy homes, they benefit from commission protection and an additional commission opportunity based on the auction sales price. DeCaro takes on the responsibilities of advertising, open houses, and showings during the marketing campaign, while co-branding the agent's name and real estate firm. Agents also receive valuable contact information on property visitors and registered bidders. Lastly, post-auction, properties typically close within 30 days with prompt commission payments.
Paramount Realty USA | For luxury real estate agents, auctioning a property presents unique benefits tailored to sellers' preferences and market dynamics. Some sellers, especially those with high net worth, are familiar with the auction process for assets like art, jewelry, and antiques, making it a preferred choice. The auction approach provides sellers with control over the timeline and sales process, attracting those seeking a fresh messaging strategy. Notably, over 75% of our closed transactions involve no buyer broker, allowing listing agents to maximize earnings by representing both sides of the transaction. For a comprehensive overview, refer to pages 14-15.
From a seller's perspective, what specific advantages does auctioning a home offer in the luxury market?
DeCaro Auctions International | Distinct advantages of auctions to sellers include freedom to select the auction date and a non-contingent, cash transaction with the successful buyer covering closing costs. DeCaro's auctions result in a swift closing, typically within 30 days, and allow for pre-auction offers and sale.
Paramount Realty USA | Much like art, rare jewelry, and antiques, treating luxury properties as unique pieces of art through the auction process offers distinct advantages over traditional sales methods. Auctions generate buyer urgency, maximizing value promptly and can be particularly effective for properties on the market for an extended period, breathing new life into listings. Comprehensive auction campaigns, coupled with a skilled listing broker, provide enhanced exposure. The compelling messaging in an auction, showcasing specifics like a reserve price, elevates interest and generates more traffic, offers, and clarity for the seller regarding the maximum value achieved. The synergy of increased exposure and a compelling message ensures a robust auction process. For further details, refer to pages 12-13.
Can you elaborate on the exclusive clientele that can be reached by partnering with auction houses like Paramount Realty USA or Decaro Auctions International?
Paramount Realty USA | Success in reaching exclusive clientele hinges on a collaborative approach with the brokerage community. We implement a comprehensive marketing campaign in conjunction with the listing broker, blending traditional and auction strategies seamlessly. Paramount's auctions are a true partnership where the listing broker performs their standard tasks with some messaging modifications, supplemented by Paramount's additional marketing strategies, such as targeted email marketing to a proprietary database of approximately 75,000 high-net-worth individuals, investors, family offices, legal professionals, brokers, and more. A robust public relations campaign, direct solicitation, social media marketing, and other techniques are employed for maximum exposure. For a deeper understanding, please refer to page 21.
DeCaro Auctions International | Partnering with DeCaro Auctions International provides agents with exposure to an exclusive high-net-worth clientele through targeted mailing lists and featured placement on the DeCaro website. With over 40 years of experience, success, and integrity in luxury real estate auctions, DeCaro has cultivated an elite clientele.
Can you explain the distinctions between Online, Sealed Bid, and Live Auctions, and the factors that guide the choice of one over the others?
Paramount Realty USA | When considering the auction format, Paramount distinguishes between online, sealed bid, and live auctions based on property characteristics and market dynamics. Online and in-person auctions (live auctions) are suitable for properties with known or quantifiable demand and where market value is easily discernible. Sealed bid auctions, on the other hand, are ideal for unique, hard-to-price luxury properties where value is subjective. In this format, bidders do not see or know what others are bidding. Paramount excels in sealed bid auction strategies, providing sellers with advantages like maximizing price without gaming, allowing bid terms, effectiveness with a single bidder, protecting listing integrity, and offering superior price protection for sellers. For a comprehensive understanding, please refer to pages 24-25.
DeCaro Auctions International | DeCaro Auctions International specializes in live, on-site auctions for luxury trophy homes, emphasizing transparency and fair competition among qualified bidders. Live auctions provide a dynamic and engaging environment that generates excitement and superior results, unlike online auctions where potential concerns about transparency may arise.
In your experience, what types of luxury properties have shown the greatest success when sold via auction?
DeCaro Auctions International | Successful auctions, in our experience, start with motivated sellers and agents who trust our expertise in handling superior properties. The crucial factor of location remains, as we focus on auctions for well-maintained, high-quality properties. We do not list foreclosures or neglected properties, ensuring our clientele recognizes the superior opportunities presented in DeCaro's auction listings.
Paramount Realty USA | While auctions are effective for highly-commoditized properties with significant demand and clear value, they are most necessary for unique, rare, special, and difficult-to-value properties. Paramount specializes in luxury homes and sealed bid auctions, leveraging the auction process to generate fair market value. For further insights, please see the details on page 30.
How do auction houses handle confidentiality and privacy concerns, which are often critical for luxury sellers?
DeCaro Auctions International | Given that discretion is key in luxury real estate, DeCaro upholds strict confidentiality for high-net-worth buyers and sellers throughout our marketing program. Only registered bidders are permitted to attend our auctions, ensuring the privacy of both buyers and sellers. We prohibit any photography, video recording, or live news coverage during our auctions to further safeguard confidentiality.
Paramount Realty USA | Paramount ensures confidentiality and privacy for luxury sellers in a manner similar to traditional brokerage practices. While auctions may attract more attention due to their high-profile nature, the handling of confidentiality and privacy concerns aligns with standard industry practices.
What are the key steps one should take for preparing a luxury property for auction, ensuring it attracts the right attention and bids?
Paramount Realty USA | Paramount emphasizes effective marketing as the cornerstone of success. While known as an auction company, the fundamental approach is rooted in comprehensive outreach and compelling messaging. The key steps involve meticulous planning, the creation of targeted marketing assets, implementation of proven strategies, and leveraging compelling messages to foster competitive bidding environments. This approach applies to auctions for luxury properties and other assets, ensuring the maximization of value for ownership.
Can you share success stories or case studies of luxury properties that have achieved exceptional results through the auction process?
DeCaro Auctions International | While we uphold strict confidentiality, we can highlight the transformative impact of the DeCaro marketing program on high-end properties. Homes that were previously listed for extended periods, blending into the crowded traditional real estate market, found renewed prominence and spotlight through our comprehensive marketing efforts. The culmination of this exposure often leads to a successful sale of luxury trophy homes through DeCaro Auctions International, demonstrating the effectiveness of our tailored approach.
Paramount Realty USA | Among numerous success stories, one notable achievement involves a luxury auction for a residence at 785 Fifth Avenue, referred by Brown Harris Stevens. The online bidding surpassed the $3.9 million reserve price and closed impressively at $6.3 million, representing a 60% increase. Notably, the auction price achieved a 30% premium per square foot compared to the average sales price at 785 Fifth Avenue by some of Manhattan’s most successful agents. For a glimpse into the actual online auction, click here and for detailed property information, refer to this link. Additional case studies can also be found throughout our overview.
How can an auction enhance the overall perceived value of a luxury property, and what strategies contribute to a competitive bidding environment?
Paramount Realty USA | While the unbiased perspective might argue that the method of sale, whether auction or traditional brokerage, shouldn't influence the perceived value of a luxury property, the reality is that presentation matters. A properly-implemented luxury property auction enhances value by effectively conveying to the target audience, especially high-net-worth buyers, that luxury homes are rare, desirable, and should command a premium—similar to the perception of art, rare jewelry, and collectibles.
DeCaro Auctions International | The enhancement of a luxury property's perceived value through auction is rooted in transparency and trust. DeCaro's commitment to truthful advertising and absolute auctions without hidden reserves builds buyer confidence, contributing to a competitive bidding environment.
Tell us more about the history and vision behind your auction house. How has your company evolved over the years and how far does your reach extend?
Paramount Realty USA | Evolution has been at the core of our journey over the years. A significant shift in our vision involved how we collaborate with the brokerage community, particularly on the listing side. Initially competing with listing brokers for listings proved to be more of a hurdle than a strategy for scaling the business. Recognizing this, we adapted our model to actively support and uplift listing brokers, fostering collaboration rather than competition. This evolution aligns with the changing landscape of the real estate industry, where sellers now seek our services, often prompting their listing agents to explore the possibilities of executing an auction for their property. Our relationship with Compass exemplifies this approach, enabling all Compass agents and their sellers to leverage our platform for a unified objective: maximizing value on the fastest timeline.
DeCaro Auctions International | For over 40 years, Daniel DeCaro has remained the foremost innovator and leader in the field of auctioning prestigious, luxury real estate assets. With an unmatched reputation of integrity, and a legacy of proven effectiveness and success, DeCaro Auctions International pairs motivated sellers with astute high-end agents and sophisticated high-net-worth buyers, globally.
Interested in considering an auction for your luxury listing? Get in touch with Paramount Realty USA and DeCaro Auctions International.
Misha Haghani, Esq. | Founder & CEO
212.867.3333
jamie@prusa.com
To learn more or submit a listing for review, click here.
John Torrey | Director of Sales & Business Development
john@DeCaroAuctions.com
949.422.6599