Sotheby’s name has been synonymous with fine art and rare collectables for more than 200 years, having facilitated the sale of some of the world’s most notable pieces of jewellery and antiques. As Sotheby’s has expanded, the auction house now conducts the sale of some of the finest luxury properties, offering buyers unique opportunities to secure the most coveted residences around the world.
With unrivalled expertise, Sotheby’s connects buyers with extraordinary properties in hyper-competitive markets. It offers a curated approach to auctions that many have tried to imitate, but few have been able to replicate the services offered.
Below, we present our perspective on the property auction process so that you can get a feel for how it works before the bidding starts.
The Unique Appeal Of Property Auctions
Property auctions offer something that traditional real estate transactions cannot. The thrill of immediate acquisition and the certainty of a decisive sale on the day and in the room can feel truly amazing. No sooner does the hammer fall to signify the closing of a sale, that a winning bidder will realise their ambitions of purchasing a new, possibly unique, luxury residence. It is, quite simply, a very gratifying experience and spectacle.
There is no better way to come into possession of such prime properties than through an auction. Many of these homes are often privately listed by sellers seeking discretion, making the auction process the preferred method for individuals wanting to sell without the public scrutiny of traditional listings and attracting the highest possible bids from the exclusive nature of the process.
Sotheby’s auctions frequently feature homes with rich histories and superb architectural characteristics, such as the “Silk Shadow" villa in Mykonos, Greece, which was auctioned earlier this year. Such properties blend exclusivity with the appeal of achieving a certain lifestyle, so they often spark fierce competition, with individuals vying for ownership.
Understanding The Auction Process
Buying a property at auction is different from buying through an estate agent – there is no waiting around for searches and conveyancing, as the auction house will have all of this information ready in the legal pack.
The auction process at Sotheby’s is intended to be a seamless experience for buyers, particularly those new to the world of auctions. Each home listed is immaculately presented with high-quality imagery, virtual tours, and detailed legal packs, ensuring that prospective bidders are well-prepared before the auction.
Properties up for auction with Sotheby’s often have significant cultural, historical, or architectural importance. Information packs give buyers access to exclusive legal documentation, property histories, and insights into the condition and market value of each listing.
Auction events can be attended in person or remotely, with digital platforms enabling global participation and opening up events to more competition amongst bidders. Online attendance allows buyers to take part in the auction if they cannot attend in person, however, they still have the option of having a representative attend the event on their behalf, should they wish to have a physical presence at the auction.
Bidding can be intense, especially for properties that attract the interest of highly wealthy individuals. The swift pace of bidding means that buyers must be prepared to make a quick decision, particularly as guide prices (intended to signal starting bids) often rise dramatically during the auction. However, guide prices can rise even before the auction begins – for lots that attract significant interest – fueling the competition further and potentially, causing certain bidders to drop out early.
Insights gathered from information packs allow buyers to make informed decisions; turning to experts for invaluable advice through every step of the process is also a wise move. Luxury homes often come with unique considerations such as heritage listings, architectural restrictions, or even tax implications specific to that property.
For example, a listed property in London may require adherence to stringent architectural regulations, which a buyer may need a UK-based legal representative to assist with. By working closely with solicitors, financial advisors, and, the auctioneers themselves, buyers can enter auctions with a full understanding of the property’s legal standing and any additional costs they may face after tabling a successful bid.
Securing Financing And Completion
Property auctions operate on a faster timetable than traditional real estate transactions. Buyers must secure their financing well before the auction begins, with deposits typically required immediately following the winning bid. In most cases, a non-refundable, 10% deposit is required straight after the lot closes, with the remaining balance due within 28 days after the auction.
For properties in the UK, stamp duty should be a key consideration, especially for high-value properties where the charges can be substantial for secondary homes. If buyers are relying on financing to complete their purchase, pre-approval from lenders is critical to ensure a bid may be completed successfully.
Many of Sotheby’s luxury property auctions suit cash buyers who can complete transactions more swiftly, giving them an edge over their competitors who may be reliant on other forms of funding. Additionally, cash buyers have far more flexibility when it comes to going higher with bids and can very easily stifle opposing bidders by moving the price of a lot beyond their reach.
For those fortunate enough to secure the winning bid, the satisfaction goes beyond the financial value of the property. However, the continued liaison with a solicitor to oversee the signing of documents and the transference of the title deed for the property is the last, but no less vital step to fully complete a purchase at auction.
Sotheby’s values both the traditions of the auction process and the experience of clients, as buyers and sellers. Auctions are as entertaining as they are fascinating, with a host of individuals coming together from around the world to appraise some of the most desirable residences. The thrill of competition, the certainty of a decisive sale, and the exceptional quality of the properties on offer make auctions the pinnacle of luxury property transactions.
