Hot Market: A Chicago Auction House for the Luxury Buyer and Seller

Led by Diana Peterson, AuctionWorks is at the top of the luxury auction trend, where buyers bid live online for high-end, multimillion dollar properties in some of Chicago's prime neighborhoods.

Photo by: AuctionWorks Opening Bid: $2.395 Million. This 14,000-square-foot estate has multimillion dollar neighbors in the posh Hinsdale area of Willowbrook, about 23 miles from Chicago's Loop. Built in 2010, the imposing Ridgemoore Drive stone structure looms over 2.3 acres of impeccably manicured grounds. Stately, comes to mind. The dramatic interiors span seven bedrooms (the master suite has a private terrace and spa bath), seven-and-a-half baths, six indoor fireplaces, a gastropub-style bar (there's a wine cellar, too) and a two-story foyer in travertine tile. It's intelligent, equipped with Smart Home security tech. Private. Lush. Stately. Presented by AuctionWorks. Online bidding begins August 25, 2014 and ends August 27, 2014. See the listing for more details. 

Diana Peterson has a matter-of-fact tone and unflinching opinion about why last year’s high-octane rollout for the auction of Michael Jordan’s $29 million, 56,000-square-foot Highland Park manse fizzled like a bad sitcom pilot. Remember? How did the presumed Auction of the Year shape shift into the Property That Couldn’t Go Away? 

They priced it wrong, says the 46-year-old president of Chicago-based AuctionWorks, an outfit she launched last December, in partnership with Sperry Van Ness, to specialize in luxury scale residential auctions.  She was literally plucked from her gig at ATG, where she rose to executive vice president and established a very successful auction division, when Sperry Van Ness offered her a chance at 51 percent ownership of her own company under their corporate flag. “That was a very exciting opportunity for me. Sperry Van Ness has a national platform,” she says about closing the deal. 
 
The young company handles commercial and residential, but the majority of their residential property is luxury. “Luxury properties tend to be hard to value and they have some unique aspects to them, much like a piece of art. So they tend to do very well at auction," says Peterson.  Yes, even in Chicago. 

Known more for understatement than the screeching ostentation of Los Angeles or San Francisco or $100 million  trophy homes in New York (the tawdry, the tacky and the multimillion dollar mistake all dwell here, but they’re the exception to the tastefully-wealthy rule), Chicago has a surprisingly robust luxury market, and with good reason.  In those glittery coastal locales you actually have fewer choices. 

“We have a very expansive downtown and Lincoln Park with luxury residences throughout. Some of the western suburbs have very luxurious properties, like Willowbrook-Hinsdale,” where AuctionWorks is auctioning a  7-bedroom, 14,000-square-foot property on 2.3 acres, slated to begin Aug. 25, with an opening bid just under $3 million. In the North Shore, they have a Sept. 22 auction on a  5-bedroom in Riverwoods. Suggested opening bid: $900,000. “I think we just have more available. They have scarcity; we don’t. “

Photo courtesy of Taylor Johnson Diana Peterson, president of Chicago-based AuctionWorks.

The AuctionWorks business model has a savvy tech edge. Not only do they target advertising for each property with a campaign reach including the  Wall Street Journal or Chicago’s  Crain’s, they e-blast brokers and subscribers of real estate journals such as Midwest Real Estate News and the  Illinois Real Estate Journal. “We’ll send out an e-blast to 32,000 people at a time for a property in an upcoming auction,” all at their own expense.

“We spend a lot of effort and our own money promoting the properties.  So a lot of our clients come to us because they’re reading about a property that we’re advertising for auction. They see that it’s a luxury property. And they see that it’s sold and we achieved a great price, because we publicize all of that as well.  We quite frequently get contacted by people who have just read about us.” In any given auction they might be touching three or four hundred thousand people with these e-blasts.  That's a long electronic arm that goes viral making AuctionWorks' marketing reach comprehensive, strategic and formidable.

Though most of their auctions are held online, they do call for pre-auction bids. And if the property is priced just right, “we will actually pull it from the auction and move forward with the high bidder in the pre-auction period.” That generally happens about a week to ten days before the auction is scheduled to run online. In this scenario, a property can sell very quickly.

“For example, we sold a Lincoln Park house in our past auction that had a suggested opening bid -- so that’s not publishing the reserve -- of $1.250 million,” she says, letting the number sink in. “And the client had told us that his reserve was $1.325 million. We ended up achieving $1.425 million in the pre-auctioning bidding.” A profit you shake hands with. (Buyer's pay a 5 percent buyer's premium.)

“It’s one of the reasons people come to us with their luxury dwellings: They want a fast result.” Perhaps Michael Jordan's people should have called Peterson -- first.

Before you jump in, learn more about  AuctionWorks and view their current listings at their website.
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