The Hamilton Home Auction That Never Happened

For several weeks, beginning in July, signs like the one pictured here popped up throughout Hamilton and Wenham. The home that was to be auctioned is privately owned and is not a short sale or mortgage foreclosure. It was being auctioned as a marketing attempt to sell a fine, high-end home that had lingered on the market for more than three years.

The home was originally offered for sale at $3.2 million, and languished on the market at that price for 478 days. Later the price was reduced to $2.95 million and eventually to $2.75 million, where it remained unsold for an additional 387 days.

Then along came Heritage Auction, one of the country’s leading auction firms. Heritage convinced the owners to auction the property, rather than re-listing it at “Fair Market Value” with a different real estate firm and agent.

Heritage Auction did an excellent job promoting the property and the upcoming auction. You should see the brochure and bid package they put together. It’s stunning and complete, with gorgeous photos, deed and assessment information, survey plans, a complete home inspection report and more.

The auction was heavily promoted as NO MINIMUM – NO RESERVE and several days were reserved for previewing the property by the general public before the auction.

The auction itself, however, was only open to registered bidders that provided certified funds (in case they were the winning bidder) of $100,000.00. That was the ticket price to attend and bid.

I was so interested in the process and who might bid, how much they would bid and what they planned to do with the property, that I was planning to attend for that purpose alone. Checks would be returned to all unsuccessful bidders (that would have been me). I was also representing clients that were registered to bid, and were seriously considering purchasing the property.

The problem, however, was that the auction was CANCELLED three hours before it was scheduled to begin. So much for the concept of NO MINIMUM - NO RESERVE.

The reason why the auction was cancelled? I received varying statements from the auctioneers, so it is my opinion that there simply was not enough interest generated (number of registered bidders) for the owners to risk selling for a lower price than they wanted. The owners apparently had the right to cancel anytime prior to the auction.

Of course my clients and any other bidders (if there were any others) were not informed of this which was disappointing and unprofessional on many levels, not the least of which was the time and effort needlessly spent on due diligence, title and mortgage research, property previews, home inspection investigation, bid deposit funding transfers and more.

Although I did not get to attend the auction, I did learn an important lesson that I share with the still-current owners and any other sellers of fine high-end properties:

On the North Shore of Massachusetts, do NOT waste your time (and others’) attempting to auction your home if it fails to sell. Instead, find a known and respected and successful real estate firm and broker and hire them to sell your home. And listen to them when they recommend an asking price. A home is a commodity, like a stock. And just like when you go to sell a stock, it does not matter what you paid for it… All that matters is what someone is willing to pay for it today.

Jay Burnham, Premier Associate

Coldwell Banker Residential & Commercial Brokerage

North Shore, Massachusetts

Direct: 978-233-2828