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Sold to the highest bidder: This company made $1 billion auctioning luxury homes

CNBC CNBC 17/09/2016 Jaclyn Louie, special to

© Provided by CNBC In the exclusive (and expensive) world of luxury real estate, entrepreneur Laura Brady has helped pioneer a new way to buy and sell luxury homes around the globe. 

Founded in 2008, Brady's company, Concierge Auctions, doesn't sell property in the traditional sense. Instead, Manhattan-based Concierge uses an auction model to handle some of the priciest real estate around.

The homes listed on Concierge Auctions are located all over the U.S. and primarily in scenic vacation destinations such as Hawaii, the Rocky Mountains (think ranches and ski homes), France, Anguilla, Jamaica and Puerto Rico. The company services 32 states and territories and 14 countries around the globe.

The typical Concierge clients are entrepreneurs, business owners, wealthy families, and some sports and entertainment figures. Buyers and sellers also come from the technology and financial sectors.

This idea of real estate auctions first blossomed when Brady and her partner Chad Roffers, who has a professional background in technology and auctions, were selling real estate in southwest Florida. They noticed that the traditional way of selling real estate was limited when it came to high-end properties, Brady told CNBC in a recent interview.

"Traditional forms of real estate offer no certainty for when and how much their property will sell for," Brady said. "There's a lot of passiveness in the traditional way, so I created a new marketing way where every transaction has a listing agent involved. It is a tool — an additional way of selling in conjunction."

Concierge's approach has paid off handsomely. Just this summer, the company's total sales topped $1 billion, selling what it refers to as "desirable" properties. 

© Provided by CNBC

According to Brady, the property itself must be in an A+ location, photogenic, beautifully constructed, move-in ready and "remarkable." The seller must also be someone who's looking to sell as a business decision rather than out of financial need such as paying down debt, in order to be able to "choose" to auction to the highest bidder. 

In other words, Concierge seeks to sell luxury homes at a price determined by demand in a competitive bidding process, rather than a set asking price.

The first step for Concierge is an extensive research process the team goes through in order to curate specific properties. Underscoring their selectivity, for every 20 properties that are viewed, the company accepts just one for auction.

Once it is determined the property is right to be auctioned, a marketing/sales and public relations plan is put together within a four to six week period before the auction.

Finally, an auction is conducted, typically on the property itself or at a nearby venue. Recently, Concierge has gotten more tech savvy by using a mobile app to conduct 75 percent of its auctions.

A linchpin of the company's approach can be attributed to Roffers, who worked in bidding during the 1990s and was familiar with the auction model. He got into real estate brokering with Sky Sotheby's — where he met Brady in southwest Florida.

Together, they began to look into auctions in relation to the real estate market. They started conducting auctions together at the brokerage and eventually Brady left the real estate company to strike out on her own. Shortly after, Roffers left as well to work with Brady. 

Brady told CNBC that part of her professional journey is to help boost women entrepreneurs who are looking to start their own business. A portion of that mission has its roots in a very personal story involving Brady's recently deceased grandmother, she explained.

"My grandmother on my mom's side was a very big mentor in my life" who passed away shortly after Brady was selected for a real estate industry award.

"I think of it as a pivotal moment because she was so excited," Brady said. "For me it wasn't just making that list. With every property we sell, it is a success."

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