The accelerated sale model is a platform that appears to be gaining momentum and shifting towards mainstream as a means to sell real estate. The following two articles below highlight the growing popularity of this method of sale. Although they discuss two different markets, Aspen and Houston, we see the same poor market fundamentals and owners struggling to get buyers to act in New England. Please click below to read the articles:

Aspen
Houston

Sam Siegel
Great Rock Real Estate

How do you efficiently market and maximize the value of a portfolio of real estate? 

We have communicated in the past that Great Rock Real Estate’s accelerated marketing platform works best for unique and hard to value properties (properties outside the box of conventional brokerage) and instances where sellers want to use a date specific aggressive approach to sell their property.  Another category that lends itself well to our platform is the portfolio sale. 

Our ability to structure the transaction becomes the catalyst for these marketing events. Whether we use the Accelerated Sale, Open Outcry or Sealed Bid Auction, we have the ability to structure all of the terms in which the properties will be offered and let the market bid based on those terms. The timeline used becomes critical as we receive all offers across the portfolio within a clearly defined window.  Where it becomes difficult to forecast value, this platform is beneficial in that one property may garner a much higher offer than expected. This increment offsets a property whose offer may have been less than originally anticipated. In addition, sellers have the luxury of making an educated decision for all offers on a specific date under identical terms. The ability for the seller to analyze their portfolio on an aggregate basis allows for flexibility to accept or reject individual offers as well as investor bulk buyer offers.

Great Rock Berkshire Sale

Our platform also works well in land sales where we can parcel the property into smaller tracts- see our current Tolland, MA Berkshire Sale for a current case study.

Great Rock Real Estate Team

Below is a recent article pertaining to an upcoming accelerated sale in Park City, Utah. The article speaks to some of the interesting fundamentals of accelerated marketing and the use of date specific sales. This marketing effort is being conducted by Accelerated Marketing Partners, a firm specializing in selling multi-unit residential condos who Great Rock strongly believes is the industry leader in this asset class:

Luxury Estate Auction Slated for Aug. 27

Participants say it is time to get buyers and sellers looking eye-to-eye

 Real estate experts are still talking about the effect of the Accelerated Marketing Partners’ (AMP) first Park City auction eight months ago at Silver Strike Lodge in Empire Pass.

Real estate value is determined by what someone is willing to pay for a home. When buyers and sellers cannot agree, no transactions are made. Realtors say the auction last January gave a realistic market value to upper Deer Valley condos and significantly improved sales.

AMP is trying for the same result again with an auction of 11 high-end estates on Aug. 27.

Not everything AMP touches turns to gold. Founder Ken Stevens confesses his March 28 auction of 44 condos at Westgate Resort at The Canyons was no “barnburner.” But it still sold more units than had been sold through normal real estate means for a year, he said.

An auction allows the market to speak, and that transparency allows good things to happen, Stevens explained.

“We put our cards on the table,” he said.

For the Aug. 27 auction, Realtors have convinced sellers of almost a dozen properties in areas like Promontory, Tuhaye, The Colony and Deer Crest to select a minimum price they’d be willing to accept. The bids will be faxed or emailed to Stevens on the day of the auction and will be sealed. The owners have guaranteed to sell to the highest bidder or anything matching, or over, the minimum published price, he said.

That’s why this home auction could succeed where others have failed. All properties that receive a valid bid will be sold, he explained.

Conceivably, no one will bid for the minimum prices and none of the properties will sell, but Stevens said he’s worked with five different brokerage firms in town to guarantee the minimum published prices are a fair starting point.

“All we can do as a marketing company is to get the word out,” he said. “The minimum bids are a fairly representative sample of what bidders will pay.”

AMP is advertising nationally including in the Wall Street Journal and the New York Times.

“We got sellers to commit money to a national campaign on a huge economy of scale to give these properties a fair chance,” he said.

The marketing has Realtor William Winstead excited for the auction. Park City real estate is getting national exposure through the ad campaign for this one auction, he said.

Winstead believes the auction will succeed because it stands to benefit both sellers and buyers.

Guaranteeing to sell for anything matching or above the published price, sellers are generating a sense of urgency in the market. These properties are unique and buyers who have been eyeing them for months need to make a smart move on Aug. 27 or lose their chance to own one, he said.

Buyers benefit from the auction because it prevents sellers from toying with them. Winstead said almost all of his clients have offered cash for certain homes, only to be told no. The guarantee of a sale is attractive.

Quite simply, Winstead said, buyers and sellers haven’t been seeing eye-to-eye. This auction is bringing sellers to the table ready to make a deal and getting buyers off the fence who have been waiting.

Even if only a handful sell at the auction, Winstead still thinks it will have an impact on the overall market. None of properties is distressed and all are high-end.

Developer Eustace Mita is selling his house Deerfield Estate at the auction for nearly 50 percent off his original asking price. Deerfield Estate is the priciest home at the auction with a minimum reserve of $15,875,000.

Mita said he was in the automotive industry before real estate, and recognizes that in both businesses there must be a sense of scarcity and urgency to pull out of a dip. He’s willing to sell properties at a loss to keep product moving, he said.

“We want to shock the market,” he explained.

The Deerfield Estate could not be built new for less than $18 million, he said. Not long ago his company sold a New Jersey property for 58 cents on the dollar, and a Philadelphia property for 57 cents on the dollar.

“Unfortunately, that’s the only option,” he said.

Even though Deerfield’s minimum reserve is more than twice that of the next-highest-priced property, he’s confident it will sell because of the value offered.

The views are unbelievable, he said. It has two elevators including a hotel-sized one. He believes it is the only property in Deer Crest that is gated and has an indoor pool. He also said it is the only residence of its kind with a private gondola. Mita said he hired the same firm that built the Deer Valley gondolas for Deer Crest to give him the same kind.

“The buyer will get a generational opportunity,” he said.

Open houses of all 11 properties will be held each weekend preceding Aug. 27. For more information visit www.auctionparkcityestates.com.

Andrew Kirk, Of the Record Staff

Posted: 08/10/2010 04:27:40 PM MDT

We continue to stand by our pledge of exclusively working with motivated sellers of premium real estate who have realistic expectations on value.  If they don’t meet this criteria, we will not bring their properties to market.

In the last week and a half, we turned away three more sellers who wanted to utilize our accelerated marketing platform but were unrealistic or simply not willing to accept where the market is at this current time. 

Our marketing program provides a platform that allows buyers to communicate what they are willing to pay for the property on the date of the sale. Our sellers have the benefit of knowing that any interested buyer and broker were made aware of the sale, they had ample time to physically inspect the property and were given a comprehensive due diligence packet to gain comfort with the asset.  Our sellers will know what the market is willing to pay for their property at the time of the sale, if they don’t like the number, then they should wait 2-4 years until the macro market fundamentals change. 

We pride our selves in being sophisticated real estate professionals who can analyze deals, perform highest and best use analysis and strategically structure the most appropriate sale for our clients.  We have the ability to fast forward our marketing process and give our clients a “mark to market” number or general range of where we think the market will speak.

We may only conduct  5-10 sales a year, but when you see our marketing, you will know that we have qualified our seller and done the market a favor so as to not waste anyone’s time.

Jeremy Freid
Managing Principal