Beacon Hill auction fiasco actually a “success,’’ marketing firm insists
Remember 20 Brimmer Street, that Beacon Hill palace the owners had pumped millions into and then, desperate to find a buyer, tried to sell it off at an auction?
You know, the one where no one even offered a bid at the big event.
Well frankly, I was floored when I saw this press release: "First Ever Auction of Beacon Hill Homes a Success."
Really, are we on the same planet here?
Well, the "success" Great Rock Auctions is talking about is that 20 Brimmer finally sold last month, for $4.3 million. (Another Beacon Hill home, on Lime Street, which got an offer above the minimum bid price, is also thrown into the press release for good measure.)
Sounds like a big number. But it also happens to be roughly $600,000 below the minimum bid price Great Auction had been seeking at its recent, ill-fated auction.
But let's not stop there, for 5,700-square-foot deluxe Brimmer Street home first went on the market in October 2008 for nearly $9 million! (Check out the Boston Real Estate Blog, which details the various price drops over the past 18 months.)
I couldn't resist the urge to call up Great Rock, both out of fairness and out of sheer incredulity as well.
Jeremy Freid, a principal of Great Rock Auctions, argued the firm, when it takes on a new property, pledges to get a sale within 90 days.
And that's just what happened with Brimmer Street, he contends. While the Beacon Hill home did not sell at auction, the firm went back to potential buyers who had expressed interest and cut a deal with one.
The final sale price, in turn, does not reflect other factors that the sellers weighed, including, in the words of the press release Great Rock sent out, "significant collateral components and other consideration."
OK. So what about the fact no one bid at the auction?
"At the auction we had some buyers who said 'we don't feel comfortable bidding for this property at a public auction,'" Freid told me. "Some of it may have to do with the culture of the Beacon Hill submarket."
While such private market auctions of luxury properties are common in New York, in the Boston area, many potential buyers still associate the process with foreclosures and distressed properties, he contends.
Really? Then how do you explain away the Bryant auction over in the Back Bay, where a number of bidders put up well over a million to buy various units?
Not mentioned by Freid, though, was a significant cost factor that may have not thrilled potential bidders.
I brought up the subject.
One broker who attended the auction that wasn't and read the fine print notes buyers would have had to pay another $250,000 beyond the minimum bid price.
Freid contends this "buyer's premium" is common at such luxury auctions down in New York.
But it's not around here and it's easy to see why some buyers might have balked at this fee, which essentially covers all the expenses rung up during the marketing of the property. (Though it does not include the commission, which is billed separately as a percentage of the total sale.)
Still, would it not have been cheaper - and less publicly embarrassing for the sellers - to have just hired a broker and dropped the price?
Peter and Elizabeth Georgantas were reportedly into the deal for $6 million, having bought the Beacon Hill home for $2 million and then spending another $4 million on everything from a wine cellar to imported Italian marble in the master bath.
It is hard to see how this fits any reasonable definition of a success, but maybe that's just me.
