An Introduction to the Luxury Home Auction Process in Hawaii
The auction sale of a luxury Hamakua Coast home has been all over the news recently. Having participated in the auction on behalf of a client, I thought I’d share some tips and insights I gained about the home auction process from a buyer’s perspective.
What Kind of Luxury Properties get Auctioned?
Many Hawaii homebuyers think the Big Island’s luxury market is contained to the resort areas, but nothing could be farther from the truth. From incredible historic plantation homes in Hilo to spectacular oceanfront estates in Kapoho, and lavish rainforest retreats in Volcano, east Hawaii offers a variety of luxury properties.
While it is true that the majority of luxury home auctions are focused in West Hawaii, from time to time extraordinary East Hawaii properties also become available through auction, which is how I recently came to represent a buyer at the auction of the most expensive property ever listed in Hamakua.
To be sure, the auctioned property, Waterfalling Estate, is like no other property in East Hawaii. Originally listed at $26.5 million, the 9.4-acre property features a 10,000 square foot house, a rooftop helipad, tennis and basketball courts with seating for 450, a deep diving pool, and a nine hole putting course.
Factors to Consider
To be sure, there was a great deal of interest in this property, with the auction itself making news on a national level. But does such interest hurt or help a buyer looking to purchase a luxury Hawaii home at auction? What should a Hawaii homebuyer be aware of in order to make the best offer on an auction property?
1. Is the property the right fit? As a buyer’s agent, my job is to make sure the property is the right fit for my client. Like a traditional home buyer offer, the client must make sure that the home is the right fit for them in the right neighborhood. It isn’t just about jumping on the media bandwagon to buy a showcase property because there’s a lot of buzz. Does the property fit their needs? What are their long-term goals for the property?
2. What should you bid? It’s best to work with a knowledgeable Realtor who knows the Hawaii real estate market and can help you make a good offer. I worked with my client to develop a bid range. This was particularly challenging in this instance because there were no comparables to this property. Previously, the most expensive single-family home sold in Hamakua was a $4.195 million Waipio Rim home on 14 acres that sold in 2005.
3. Contractual obligations. As part of the luxury home auction process I walked my client through the contractual obligations, helped them register their bid, and submitted their deposit. These important key steps are very similar to those of a traditional home buying process. A key difference in the luxury auction process is that the buyer does all their due diligence prior to the auction date. It’s actually one of the elements that help make the home auction process run smoothly and quickly.
Phone bidders are welcome at luxury auctions
4. Unexpected factors. Because my client was out of state at the time of the auction, I attended the event on their behalf and bid for them. I was in constant phone contact with my client throughout the entire process. Concierge Auctions, which facilitated the auction process, is very sensitive to phone bidding clients. If a phone bidder suddenly loses their phone reception (as was my case when my client’s call was dropped due to spotty cell phone coverage), the auction team will pause the auction until all bidders are connected to their representatives.
In the end, my client was not the winning bidder. Originally listed for $26.5 million, the property sold at auction for $5.750 million and closed escrow a few weeks ago.
Want to Know More?
I have no doubt there will be more luxury home auctions in east Hawaii, although it may be a while before we see the level of buzz and excitement witnessed with this particular auction. When the next luxury auction occurs, I’ll be there representing my client’s best interest to help them get the best price possible for their dream Hawaii home.
If you’re interested in learning more about luxury properties in Hamakua and East Hawaii, give me a call me today at (808) 987-4511 or email me.