Its not the place you might expect to see a housing auction.
Continue Reading Below
A custom-built mansion in Carbon Beach, Malibu, Calif. will be auctioned off this Sunday, according to the Los Angeles Times, in the elite stretch known as "Billionaire's Beach. The starting price for the six-bedroom, 9 �-bathroom mansion, which includes a 16-seat home theater, a pub, gym, wine cellar and aquarium, will begin at $22 million. This is nearly one-third of what the asking price was three years ago, the LATimes reports.
While those auctioning their homes may be hopeful the buzz created by the move will jumpstart high offers and bidding wars, Real Estate Lawyer Jerry Feeney said auctions send one message to potential buyersdesperation.
"People have this idea that auctions will get that frenzy going, but its a misnomer in real estate," Feeney said. "You might have that $20 million Malibu beach-front property, but there's still many other robust forms of selling that will get you exposed to more buyers."
Auctions are best for selling things like unique pieces of art, Feeney said. Those looking to buy homes or property want to see the offerings at their own leisure and pace, a major turnaround from the housing market of days past, he said.
"In the old days, you would price property aggressively, people would bid on it and up to it, but there wasn't a danger in pricing over the market," he said. "When people don't change in reaction to market trends & that property & languishes on the market. A lot of sellers are still in denial about the true valuation of their property and are more focused on what they need to get and what they bought it for& that is absurd."
Rather than putting a home up for auction, Feeney said he would price to sell the property, and market it aggressively to get buzz going. He said this would create a bidding process without the high-pressure atmosphere of an auction, and also remove that "desperate" notion surrounding the process.
"Auctions are so unusual in real estate, it's not the norm," Feeney said. "The first thing that comes to mind is, 'Oh God, they need to sell it.'"