Luxury Auction Seeks ‘Absolute’ Market Value

By: DIANA GOLOBAY
October 21, 2009 4:35 PM CST

A five-bedroom, seven-bath luxury estate 25 minutes from Manhattan is set to hit the auction block on November 17 — with no minimum bid required.

This set-up, called an “absolute” auction, is meant to set the market value determined by a competitive bidding process. It eliminates minimum bids and reserves, meaning in theory the market could set the value at as little as $1, if only one lucky bidder shows.

But considering the amenities, that scenario is unlikely. The registered bidders, after all, are required to submit a refundable $50,000 cashier’s or certified check prior to the auction — a significant up-front commitment. The expectation, it seems, is for a strong bidder turnout.

The property going to auction November 17 boasts 10,000 square feet of estate on a five-acre lot located in Long Island’s Gold Coast community.

Unlike some of the historic estates and neighboring mansions — several of which are no more than ruins now — the property to be auctioned is a new construction. Built in 2003, the house features recreational and entertainment rooms, a gourmet kitchen, a three-floor elevator and a four-car garage.

The absolute auction is put on by Grand Estate Auction Co., which specializes in auctioning luxury homes and so far auctioned 250 properties typically in the $1.5m to $10m range.

“The benefit of an absolute auction is that bidders determine the true market value, which is the ideal way to sell and buy high-end residential real estate in today’s market conditions,” said Grand Estates president Stacy Kirk in a statement. “Bidders know the seller is committed to sell and have an opportunity to thoroughly examine the property prior to auction. Sellers avoid the hassles of unscheduled showings and cut onerous carrying costs.”