In a Calgary first, owners turn to auction to sell luxury home

By Vince And Mary | | Tagged Buying Home , First Time Home Buyers , Property Management , Real Estate Agency , Real Estate Agents , Real Estate Office , Realtor Careers , Realtor Recruiting , Selling Home

To help market a nearly $4-million home, its sellers have changed the address numerals to appeal to prospective Asian buyers.

But the main push to sell the Collingwood-area home after two years on the market will be conducted by an auctioneer in Texas gavelling the 4,625-square-foot home of Clarendon Road online bidders.

It’s the first of its kind in Calgary, said real estate agent Mark Evernden.

“This is the first inside the city limits — there’ve been auctions in rural areas and acreages,” he said.

“If we don’t get the traditional sales, we go to auction . . . in a way, it’s not that unique — you go to New Zealand and Australia every house is auctioned.”

Its oil and gas industry owners built the house as “their dream home” but are looking to downsize, said Evernden.

With the 11-year-old, five-bedroom nouveau tudor, European-style home with a Guinness-themed bar and climate-controlled wine cellar being marketed to potential Asian buyers, its address was shifted from 84 to 86, said Evernden.

“Four is the sign for death on the Asian market, so we can’t have that,” he said.

It’s just another tool to sell high-priced homes that are proving a challenge to sell in today’s economy, said Evernden.

“The market value is running about 30 per cent under replacement value, meaning if you put $2 million into a home, you’ll get back $1.5 million,” he said.

“A deal for this house would be $2.6 to $2.8 million, because it would cost $5 million to replace it as it stands.”

The auction is unreserved — one without a set base price — noted Murray Lange of Concierge Auctions.

But he said competition between an expected seven to 10 bidders should pump up the final sale price.

“We can accommodate bidders from all over the world on this platform . . . the increments will become gradually smaller and then down to two bidders,” said Lange, adding he expects the Feb. 28 auction to last no longer than an hour.

“Just because no base has been set doesn’t mean it’ll sell for nothing.”

To ensure bidders are serious, they must post a refundable $100,000 deposit and show they have either cash or financing to close the deal.

A starting bid price will be unveiled by the auctioneer, he added.

Lange said plenty of other Calgary-area homes could potentially go on the auction block after gathering dust on sales listings.

“A lot of the time there are 50 to 60 homes listed at over $2.5 million and there’ll be 20 sales of those in a year,” he said.

“There are a lot of luxury homes languishing on the market — it’s amazing to see how many of these homes have been sitting there for over 1,000 days.”

By contrast, auctions create an urgency among buyers who are serious about a certain property, said Lange.

Last month, luxury homes realtor Sotheby’s International Realty Canada said 677 homes valued at more than $1 million were sold in Calgary last year, an 11 per cent increase from the year before.

But they also said sales of homes priced over $2 million last year dropped by 18 per cent, with only two homes priced at more than $4 million moving — half the number from the previous year.