High-end home auctions on the rise in Park City
It’s a timeworn model: A homeowner looking to sell his or her home hires a Realtor, who helps put the property on the market, stages it, then waits for acceptable offers from prospective buyers. Eventually, if all goes right, the seller walks away happy, able to slip a hefty check into their pocketbook.
But recently, a different approach has begun to shake up the Park City real estate scene. Increasingly, putting a property up for auction has become an enticing alternative for homeowners in the area looking to get their homes sold as fast as possible.
Daniel DeCaro, president and founder of Maryland-based DeCaro Luxury Auctions, said his firm has facilitated the auctions of six homes in the Park City area since April 2014. He acknowledges the method is not for everyone, but the choice comes down to one thing: the value of time.
Rather than waiting potentially years to sell a high-end property — something local Realtors say isn’t uncommon — homeowners who auction their properties are willing to risk receiving a lower price for a quick sale.
"Realtors bring us in to clients who say, ‘Look, I want my property sold, period. Give me the solution,’" he said, adding his company works with local Realtors throughout the process.
Ann MacQuoid is one Realtor who sees value in that method. A broker at Chin, MacQuoid, Fleming and Harris and Berkshire Hathaway HomeServices Utah Properties, she has sold two properties through auction and said taking that approach to unload high-end homes is quickly becoming a trend in Park City.
Essentially, MacQuoid said, homeowners pay an auction firm, such as DeCaro Luxury Auctions, upfront to market their homes both to buyers across the U.S. and internationally. The result, if all goes according to plan, is a horde of interested potential buyers by the auction date.
"One thing that Realtors can’t do as effectively as an auction is create urgency," MacQuoid said. "We can’t say, ‘OK, you’ve only got three months to buy this house or someone else will buy it.’ The auction process does that."
In fact, the process sometimes works so well that the actual auction isn’t necessary. Bill Redeker, a longtime developer and real estate agent with Berkshire Hathaway HomeServices Utah Properties, put a property he had developed up for auction last year. But days before the auction was set to be held, a buyer who didn’t want to lose the home to another bidder offered Redeker a price too good to pass up.
"For many sellers, I think that’s probably the best outcome," Redeker said.
But the auction process is not without risk. Auctions like the ones DeCaro facilitates are referred to as "absolute" auctions, meaning the top dollar that bidders are willing to offer is the final price. For sellers, there is no turning back once an auction begins.
"It’s not for the faint of heart," MacQuoid said.
The process was intense for Redeker. He had chosen the auction method because he viewed it as an assertive approach that aligned with his business strategy. But the thought that there was no guarantee he’d get the price he sought for the property intimidated him.
"I’ll be perfectly frank — there was some anxiety along the way," he said. "But as we got closer to the auction date, we had a better sense of maybe not where the price would be, but of the interest of bidders."
Redeker attributes the rising popularity in auctions in Park City to, in part, homeowners and Realtors beginning to see the process as more legitimate than perhaps they once did. The fact some homes have sold before the auctions have actually happened has helped, too.
"It shows that, yes, you can go through a high-end luxury process and get a good result," he said. "I suspect in the past, many people must have thought, ‘Boy, (a property) is troubled and there must be something wrong with it.’ But that just isn’t the case with these higher-end properties."
MacQuoid said the nature of selling expensive homes in Park City has made the increase in auctions a logical development. Prospective buyers typically visit Park City several times over the period of a couple years before deciding to buy a home here, meaning for sellers, long waits are commonplace.
"It is not unusual in our marketplace to have big listings, over $5 million, on the market for a year or so," she said.
To DeCaro, that means opportunity — both for his firm and for sellers who see the value in taking a risk.
"If you want your property sold now, versus five years from now, you just have to take a more aggressive approach," he said. "It’s no different than a person that sells a van Gogh at auction. They immediately find the market value of that property."
A study pegged the number of Sundance Film Festival attendees at 122,313, with the event generating an economic impact of $182.5 million. Both numbers represent a slight decrease from the 2018 festival.