Home prices have finally recovered from the catastrophic bubble bursting of the Great Recession, and now, a Los Angeles brokerage firm is trying to take advantage of rising prices with new bidding software.
In the same way that Uber and Airbnb have “disrupted” the hotel and transportation industry, Deasey/Penner and Partners hope that their new software, called plumBid, will disrupt the luxury housing market.
Although it can vary between regional markets, luxury home builders typically define luxury housing as properties priced in excess of $1 million, which leads to higher expectations among both buyers and sellers.
PlumBid Inc. launched in the first week of July, and functions as a VIP bidding service for luxury home sales. If no one accepts the “preemptive” asking price before a predetermined auction date, then the listing will open up to a three-hour live auction.
The system is already being tested out by Los Angelenos trying to sell luxury homes. Retail executives Dave DeMattei and Patrick Wade are the owners of a Beverly Hills Italian-style estate, which they need to sell quickly after purchasing another home. They set the preemptive asking price at $11.5 million, and potential buyers have until July 26 to accept the price. After that, the exclusive 90210 property will go up for auction on plumBid.
Unlike startups like Uber or Airbnb, plumBid wasn’t created by a young upstart looking to completely change the way the industry works. Instead, the 100-agent strong real estate brokerage firm simply wants to find better ways to sell luxury homes in 2015.
“We wanted to come up with a more efficient way to market a property,” said Deasy/Penner and Partners President George Penner.
To attract their first VIP users, Penner says that sellers on the online auction site won’t pay any fees; however, buyers will pay a 1.95% premium fee on the luxury home’s sale price.
There are already home auction sites offering traditional live auctioneers, but plumBid will use a “descending Dutch auction,” wherein the price starts high and decreases in increments.