Spotlight ON: Craig King, President, J.P. King Auction CompanyAugust 13th, 2012 by Ori Klein
Spotlight on . . .Craig King
This month we had the pleasure of speaking to Craig King, President of J.P. King Auction Company. A renowned industry leader dealing exclusively with high-end luxury properties nationwide, J.P. King has a stellar success rate of sales utilizing the latest media technology, integrated marketing strategies, and focused attention on the client and their asset. We discussed a variety of topics with Craig including absolute auctions, the use of social media, and the future of luxury properties being sold via the auction route.
PA: J.P. King is regarded as a leader in Luxury Real Estate Auctions. Tell us about how the company earned this place at the top.
CK: J. P. King began selling luxury properties in 1992 with the successful auction of Calumet Horse Farms in Kentucky for $19 million. From there, we were called to south Texas to sell an estate on 3,000 acres, which sold for $8 million, and the rest is history. We have now sold properties in all 50 states and six countries for celebrities such as Barbara Mandrell, former Atlanta Braves pitcher Mike Hampton, Karl Malone and top business leaders. We have sold properties to several of the Forbes list of the wealthiest Americans, including Donald Trump. On our current schedule, we’ll be auctioning the home of country music legend George Jones on July 7th.
PA: We are seeing a tremendous rise in luxury properties sold at auction. Can you tell us why?
CK: People follow success, and others are seeing the success we have had at J. P. King, spurring the mass entry into the luxury auction business. There is a need in the marketplace for an efficient sales process for these high-end properties; they are hard to value due to a lack of comparable sales, and each is unique with very personalized and expensive features. The market for these properties is razor thin, so a highly refined marketing process must be utilized to reach the right buyers.
PA: What do you speculate for the future of luxury properties being sold via the auction method (quantity, location, sale price)?
CK: In the future, we expect to see an increase in luxury property auctions. The perception that auctions are only for those that “have” to sell is dissipating, and more of the wealthiest Americans are seeing it as the most viable way to sell their properties. For us, inquiries have been up about 50% over the past 18 months, and these inquiries are tomorrow’s sellers.
PA: How many luxury property deals do you look at versus actually take on for auction? Why would you turn down a deal?
CK: We contract one in every 10 properties we evaluate. We look for the right property and seller situation. If a seller is not realistic about his or her goals for the sale, we decide that it’s not the right fit for a J. P. King auction.
PA: Geographically, what areas are doing well for luxury properties?
CK: Geographically, we look for prime second home markets — like secluded homes out West and large metropolitan markets that have a buyer pool to provide a competitive bidding event for our auctions.
PA: Is marketing towards real estate brokers a big part of your strategy and do you find them to be cooperative in the process or a deterrent in getting the property sold?
CK: The real estate brokerage community as a whole does not understand auctions. There are good brokers that make great partners and others that do not. We do not market directly to brokers, but often the property owner has them inquire with us for information and a meeting. We do welcome working with brokers and recognize that we can help make each other’s jobs easier, so we attend seminars on a regular basis to help educate how the auction process can actually work for them rather than the popularly-conceived idea that it works against them.
PA: How strong of an advertising vehicle has social media been in your marketing plan?
CK: For many small businesses, social media marketing has the potential to be a great avenue to reach its audience, but it can be a slow process to build a legitimate and targeted audience. We implement social media in every auction campaign as we strive to connect with our audiences and use social media as a place to have a conversation, rather than a billboard. You can follow us on Twitter at @jpkingauction and on Facebook at facebook.com/jpkingauction if you’re interested in connecting with us.
PA: What would sellers need to know about how you determine a marketing budget?
CK: A seller needs to be prepared for a reasonable marketing investment for the property to be sold. Every property is unique and a customized marketing plan should be developed and implemented. Marketing a South Florida oceanfront mansion may need both a national and
international campaign, while a Dallas mansion can be marketed primarily in Texas. Every campaign is different, but we present our professional suggestion on what is best for each individual property rather than trying to save time by using a one-size-fits-all mentality.
PA: We see on your site that most of your offerings include high-end video – what inspired this aspect of your marketing program and how did you get it started?
CK: Our marketing is top notch. We know the buyers we seek are busy, and they have countless buying opportunities presented to them daily. We have to present our sellers’ properties in a way to grab attention and provide a good overview of the opportunity we offer. The video has worked very well for us. We then provide extensive due diligence and property information for their attorneys or brokers to look over to help them prepare to buy.
PA: Tell us about some unique upcoming auctions.
CK: We have many great auctions coming up and several more that are in the works. We have two mansions in the heart of Dallas on 14 gorgeous acres, 1,900 acres of duck hunting land in Tennessee, the home of George Jones that I mentioned earlier and several premier homes out West in Washington, Montana and Colorado.
PA: We have seen a lot of taglines where auctioneers are trying to communicate that they are offering an absolute sale, but in fact it seems that they are not. What information should a buyer look for if they are interested in absolute auctions?
CK: We have a real concern with the illegal and unethical practice that is used by companies of advertising an absolute auction and then canceling them if a seller’s secret reserve is not secured for an opening bid. Advertising should be truthful and clear. If the property is selling with a reserve, we must not lead the public into believing that it is absolute. We have a responsibility to report these activities, and if we do not regulate it as auction professionals, someone else will — and we may not like the results. Buyers and sellers alike should deal with reputable companies, and a quick Internet search will give them a good idea of whom they are dealing with.
PA: Do you offer online “timed auction” Internet-only sales? If yes, how have the results been and what type of property is most appropriate for this style of sale?
CK: At J. P. King, we offer all kinds of bidding platforms for our auctions. We find in the luxury auction business, the live events with online simulcasted bidding have had the best results.
PA: As it relates to market price set by a broker or a BPO, does the final purchase price at auction reflect the true market value?
CK: The market price of these homes are difficult to determine, making the auction a preferred sales process for many sellers. The conventional sales process may take two to five years to sell these homes. Appraisals we often see use comps that are out of the area because there are no comparables in that particular market. The marketing time for a sale in the appraisal may be 24-36 months. I like to say we get a quick sale market price. If you asked that same appraiser to take that appraisal and adjust it for sale in 90 days, his evaluation would come back much lower. An adjusted price is comparable to the prices we get at auction without the long-term carrying costs and hassle.
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