Memorial manse owners opt for online auction route to get it sold
It can take months, if not years, to find a buyer for a house with a mid-seven-digit price tag.
The owners of a nearly 12,000square-foot Tuscan-style manse in Piney Point Village are hoping to sell theirs in just six weeks.
The couple — who own several homes and are downsizing — tried selling the traditional way. But after about seven months on the market — most recently asking $7 million — they hired an Austinbased auction house that specializes in high-end properties to market their estate and sell it through an online bidding process.
Moni Bohnisch, the real estate agent representing the sellers, who she declined to name, said luxury property auctions are common in Europe and Australia and have begun gaining popularity in the United States.
“For sellers, it’s a good opportunity to market their property in a very concise period of time, and it predetermines the sale date,” said Bohnisch, an agent with John Daugherty Realtors. “It allows you to gain more interest and attracts more qualified buyers to their property that would not come in a traditional real estate method.”
Bidding will open digitally on
Dec. 10 and culminate in New York on Dec. 12 at a live auction at the Dominick Hotel, ending at 5 p.m. Eastern. The auction house, Concierge Auctions, will run the threeday process in which bids will be made public but the bidders will remain anonymous.
“Our goal is to get at a minimum of three to five bidders,” said Gregory Shannon, a project sales manager.
Qualifications to participate are steep.
Those wanting to make a bid must put $100,000 in escrow, provide a proof of funds letter and agree to terms, which include a 30day close, Shannon said. The $100,000 either goes toward the purchase price or is refundable to those who don’t win the auction. The company charges the buyer 12 percent of the purchase price, and agents are paid by the seller.
If the winning bidder does not close, the deposit is divided between
the seller and Concierge. The company would not disclose those terms.
Fees may apply
Concierge typically spends up to six weeks marketing a property before taking it to auction. It hosts daily open houses and a preview party for agents and potential buyers. A crowd of about 40 agents and company executives attended an event catered by Churrascos at the Memorial-area house last week.
The company is offering an incentive if the opening bidder wins the auction. In that case, the bidder will receive a 6 percent credit on its initial offer from the seller against the purchase price.
But before the auction process begins, the seller can decide whether or not to move forward. After seeing any pre-bid amounts, they can opt out of the auction the night before, though a cancellation fee of anywhere from $25,000 to $75,000 may be applied, Laura Brady, Concierge founder and CEO, said in an emailed statement.
“We do not charge upfront fees to our sellers,” she said. “In turn, we are very specific about the properties we represent, as we absorb all of the marketing and exposure costs and only earn our fee upon a successful closing.”
So far this year, Concierge has taken 200 properties to auction, including a dozen in Texas. The company did not provide details for its Houston and Texas sales, but said on average, for every 10 properties it takes to auction, seven will result in a closing.
The company’s last Houstonarea property to sell at auction was an 8,000-square-foot home in Richmond with an art studio, infinity pool and “in-law wing” with a fireplace and kitchen. The purchase price, including the 12 percent fee, was just over $2 million. It was a reserve auction, meaning the seller could reject the final bid if it didn’t meet expectations.
The owners of the Piney Point Village house have opted to go to auction without a reserve price.
“I think it really works better because it attracts more bidders,”
Bohnisch said.
Creating urgency
The last local property that did not sell at auction was a 5,700square-foot midcentury-style home on Chatsworth Drive, near the intersection of Memorial and Silber. The house had previously been listed at $4.6 million before it went to auction earlier this year.
“Despite having a field of qualified bidders, the seller elected to exercise their right to cancel prior to bidding opening,” Brady said.
That home, now listed at $1.65 million, is under contract, according to HAR.com.
A slowing housing market can also convince sellers to take their properties to auction.
In 2016, the year oil prices fell to less than $30 per barrel, luxury home sales also suffered.
The owners of a 30,000-squarefoot estate in the exclusive Carlton Woods section of The Woodlands hired Miami-based Platinum Luxury Auctions to sell their home — which several years earlier was listed for $19 million — for a minimum
of $6 million.
Several offers were made before the auction date, and the seller went under contract with a buyer who ended up paying a reported $7.1 million.
The Memorial sellers are Michael and Celia Maestri, according to property records. The couple, who declined to comment through their agent, purchased the home on North Country Squire in 2014 for between $5.1 million and $5.9 million, Houston Association of Realtors records show. Sales prices are not public in Texas.
Bohnisch said they have put $1 million into the home, which boasts barrel-valuted ceilings, marble floors and a 16-seat movie theater.
Potential buyers will likely offer bids in $100,000 increments. But Shannon said bidding never really heats up until the end.
“It’s like eBay,” he said. “The last 30 minutes are when things get exciting.”