New Canaan isn’t typically thought of as a town where you see real estate sold through auction. Yet tomorrow, Oct. 20th, New Canaan will see two real estate auctions begin, and both will be for multi-million dollar properties. The properties going to auction are 544 Oenoke Ridge Road, which was originally listed for $22 million but is currently on the market for $9,900,000 million, and 360-364 Laurel Road, which started out priced at $12,500,000 and is currently $10,900,000.
Both estates have been on the market for some time and a slow high-end market in the Westchester and Fairfield County area can be assumed to have played a part in the two seller’s choices to sell via this method. However, when we do see real estate auctions it’s not uncommon for them to be for a luxury property, and there is a reason for this.
Tom Banner of Concierge Auctions, the company that is overseeing both New Canaan auctions, compares the difficulty of selling some luxury properties to selling a Picasso painting. “The history we have seen is that [real estate auctions] work far better in the luxury segment, because there often aren’t any comparables in the luxury market for certain properties,” Banner says. “Take Laurel Road. There are no comps for that property. Good or bad. It’s just a very unique house and little you can compare it to. And an auction is a way of getting people in a room and determining its value.”
While the homes will go up for auction on the same day they will be taking two very different approaches. The format for Laurel Road will be an Absolute Auction. In this format, the house will be sold to the highest bidder on auction day, regardless of price. “To take that to the most absurd end, yes, in an absolute auction the property could sell for one dollar,” says Banner, who also points out that there is a financial incentive given for an opening bid of $6.9 million or above.
The property at 544 Oenoke will be having what is called an “Instant Gavel Auction,” with a minimum undisclosed reserve. There is a minimum bid of $3 million, but the undisclosed reserve (essentially how much more the seller needs over $3 million) must be met or the seller has the option of not selling. This auction will take place on line (“think ebay” says Banner), over the course of five days from Oct. 20-25.
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