Giving buyers a chance to set the purchase price of their dream house while saving sellers time and money has created a successful model for Supreme Auctions CEO Maverick Commins.
Metrics and a streamlined no-reserve process that lets sellers and prospective buyers know that a specific house will be sold on an exact date regardless of the price has propelled Commins’ Scottsdale-based company since its 2002 launch.
Specializing in high-end luxury homes, Supreme Auctions has sold houses in more than 70 countries, Commins said. So far, more than 30 auctions worldwide are scheduled for this year. Commins expects that number to increase to as many as 100 within four years, which would generate $1 billion for the company.
The no-reserve message is often missed by agents in traditional real estate, Commins explained. However, buyers notice, and they’ll pick up the phone.
“It could be the only chance in their lifetime to buy at their price. It’s too good not to participate. They get a shot,” Commins said.
On the other side of the transaction, the costs to keep a home of that caliber show-ready, plus usual maintenance, can quickly skyrocket while it sits on the market. For example, Commins said 47 percent of Paradise Valley properties with list prices of $2.5 million or higher stay on the market for three years or more. Alternative selling methods become appealing.
Supreme Auctions sellers know that after 45 to 60 days on the market, their house will be sold and typically at top dollar, he said. Winning bidders pay a 10 percent buyers premium, which goes to Supreme Auctions. For example, a $2 million home will close at $2.2 million, with Supreme taking $200,000.
Commins admitted that the idea of auctioning a high-dollar home may not resonate immediately with everyone. But it works.
“It sounds crazy, right? It takes a lot of grit. But it’s easier to get a group of people together and get them to bid upward,” Commins said of the strategy.
Supreme Auctions deals with homes mostly in the $2 million to $30 million range. Five years ago, it facilitated the sale of a $39.5 million home in London.
The property is marketed and shown to 200 to 300 would-be bidders, who are driven to the home over four weekends prior to the auction. About 30 percent of the properties sell before the auction date, but 70 percent go on the big day, Commins said.
There is no auction caller holding a microphone and shouting out partially inaudible numbers in a rhythmic cadence to an audience holding paddles and sitting on folding chairs. Bidders must put $100,000 to $250,000 into an escrow account in order to be approved for the live auction. The event is not open to the public and is a sophisticated catered affair.
Winning bidders have 24 hours to deposit 10 percent of their winning bid price and must close within 30 days. About five to 10 bidders attend each auction.
Lesley Vann, a real-estate agent with Russ Lyon Sotheby's International Realty, said she saved her client time and money by partnering with Supreme Auctions.
Vann’s client was eager to sell his mountain home in a gated Carefree community. A world-class photo shoot and listing drew some interest, but the reality of a sluggish market for an older luxury property purchased in the '90s sunk in. After five months, Vann realized they needed to pursue another selling strategy and came across Commins’ auction house in 2016.
“I learned about their methods. It sounded too good to be true,” said Vann, who’s based in Scottsdale. “But, they put my mind at ease about the process.”
She partnered with Supreme Auctions. Two months after the home started showing, it sold for the winning bid of just over $2.3 million — what Vann said was top dollar and at the time a record-breaking sale for the town of Carefree.
“If I had done the traditional real-estate path, it would’ve taken five years and hundreds of thousands of dollars,” Vann said.
Vann called working with Supreme Auctions one of the highlights of her career.
“They are everything you could want from a business partner. They keep their word and integrity. … They walk the talk,” she said.
At 40, Commins retired after selling a London-based firm that sold large high-end worldwide resorts and homes located on them — think the residences at the Biltmore — to an international conglomerate.
Commins returned to the United States and a year into retirement started looking at the traditional model for the real-estate market, which was changing dramatically mostly due to the internet, he said. With his experience in luxury-property sales and understanding of the auction industry and metrics, Commins saw an opportunity and unretired to launch Supreme Auctions.
Commins has intentionally kept his firm and its client list small after seeing many successful businesses grow, only to implode. The company accepts only one in 20 people who come to him. Often, that’s due to unrealistic expectations, and Commins refuses to make a promise that cannot be fulfilled.
During the recession, many competitors expanded their model to include lower-priced homes. Commins didn’t give in and remained loyal to his original model.
“That’s not sexy. Our homes are sexy,” he said.
In an industry that’s fueled by big dollars, glamour and the temptation to exaggerate facts and reality, staying aboveboard is vital to keeping Supreme Auctions on solid ground. Commins said his company has never been sued or faced litigation, which often arises in the industry from dishonest dealings that result in sales far below inflated assurances. Being self-funded and without loans helps.
“When there’s payroll and investors, you do things you shouldn’t do,” Commins said. “It’s much easier to tell people the truth than tell them one thing and do another. It’s not about the almighty dollar. It’s about the client.”
Where: 5301 N. Pima Road, No. 130, Scottsdale.
Interesting stat: The average starting price for a luxury property worldwide is $2.2 million, according to Christie’s International Real Estate.
Details: 866-929-2243, supreme-auctions.com