Concierge Auctions, the market leader in luxury real estate auctions, has faced accusations that it manipulates bids to juice up its business.
Since 2014, the company has been a defendant in 10 lawsuits, half of which accused Concierge of using some type of fake bidder to increase the price of homes or to make sellers think there was more interest in their properties than there really was, according to a review of suits on Courthouse News by the Wall Street Journal.
In one suit, Joanne Brown accused the company of not telling her about the two lowest bids for her apartment in Telluride, Colo., which were around $2 million and $3 million. This gave her a false impression of how much the property would sell for—executives advised her that it could go for between $10 million and $14 million, but the winning bid was for about $7 million. Half of the lawsuits filed against Concierge accuse the firm of not disclosing registered bidders who had proffered lowball bids or using some type of shill bidder to convince clients to work with them.
Concierge denied all the lawsuits’ allegations, saying many were dismissed, and added that four of the suits led to payments to Concierge. Four lawsuits are still ongoing.
“Concierge Auctions does not and has never used shill or fake bidders,” the firm’s president, Laura Brady, told the Journal. “Any accusation to the contrary is false. The bidding for our auctions can be viewed online in real time, and our software maintains records of every bid placed and by whom.”
The company has been trying to rebrand the auction business as just another way to sell luxury properties, rather than a last-ditch strategy for distressed homeowners. In January, it set a record for the priciest U.S. home ever sold at auction, an estate in Hillsboro Beach, Fla. that sold for $42.5 million. Brady told the newspaper that the firm closed $390 million worth of deals in 2018, up from $340 million in 2017. [WSJ] – Eddie Small
Via • The Real Deal Miami
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