AUCTION AGREEMENT FAQS
I HAVE A LISTING AGREEMENT ALREADY. WHY DO I NEED AN AUCTION AGREEMENT?
Similar to the agreement you have with your agent, the Auction Agreement clearly outlines your commitments to us and our commitments to you; allowing us to work towards a successful outcome at auction. The Auction Agreement has been reviewed by thousands of sellers and attorneys who have engaged with us over the past 15-plus years. It is designed to protect your interests and ours and outlines how we work together during the auction process.
WHY DO I NEED TO USE A LISTING AGENT?
Agents are important to our process. Most sellers retain us due to the power of our international database combined with the effectiveness of our global marketing platform. On average, a third of buyer demand is generated from the local community, so it’s necessary to have an engaged listing agent who can manage the activity in the area. Over the last decade, we’ve found that local buyers prefer to work directly with the listing agent, or in conjunction with the local brokerage community. These buyers also prefer to speak with a local agent and get a professional opinion on the property. The agent's knowledge and expertise in the local market helps you get a better price in the market.
WHY IS THERE A PROTECTION PERIOD?
In all of our auctions, you have the right to cancel the auction prior to the commencement of the auction. You’re always in control. If you cancel and want to sell outside of the auction format, the protection period ensures that we are compensated for the effort we have put forth on your behalf.
WHAT IS A STARTING BID INCENTIVE?
For No Reserve auctions, we offer a Starting Bid Incentive, a credit to reduce the Buyer’s Premium by 50% related to the Starting Bid Amount, encouraging buyers to submit a starting bid prior to the start of the auction.
WHY IS THE GOVERNING LAW IN NEW YORK?
We’re a global firm operating in 46 states and 36 countries/territories. New York is an internationally recognized venue, and this allows us to attract an international pool of qualified buyers. In the unlikely event of a dispute, the governing law in New York makes it easier to resolve disputes with a global audience, via the arbitration process outline by AAA or American Arbitration Association. This benefits you because there is more control over the process, typically lower cost, private, and offers a shorter resolution time.
ARE THERE ANY ENGAGEMENT, MARKETING, OR NO SALE FEES?
No, we do not charge any seller fees. A comprehensive marketing and sales program is developed and managed on behalf of your property. In all of our No Reserve auctions, the seller is in full control of deciding to cancel their auction for any reason.
WHAT HAPPENS IF THE WINNING BIDDER DEFAULTS?
Bidders are generally required to deposit $100,000 in escrow, and provide proof of funds, to participate in an auction. In the rare case a bidder defaults, they forfeit their deposit, and we split it with the Seller 50/50. The buyer is also responsible to pay Sotheby’s Concierge Auctions an additional penalty of 12% of their high bid. To further protect our Sellers, we have the ability to name the second highest bidder the winning bidder within five days of the end of the auction. The second highest bidder is required to honor their bid.
