Concierge Auctions

Concierge Auctions is an Austin, Texas-based company that auctions residential real estate properties selling in the range of $2 million to $40 million.[1] Almost 90 percent of its auctions are conducted through a smart phone app.[2]

Concierge Auctions
IndustryReal estate auctions
FoundersLaura Brady and Chad Roffers
Headquarters
Austin, Texas
Websitewww.conciergeauctions.com

From its founding through 2019, Concierge Auctions has sold approximately $1 billion in real estate properties among 38 U.S. states and 18 foreign countries.[3]

The two founders (Laura Brady and Chad Roffers) met each other in 2004. Brady was a real estate agent and Roffers owned a real estate brokerage firm. Together, they created Concierge Auctions because they were “frustrated by limitations in the [real estate] industry.”[3] The company was launched in 2008.[4]

The company has faced controversy. Roffers filed for personal Chapter 7 bankruptcy in 2012.[5] Additionally, the company has been involved in a series of 10 lawsuits brought by clients since 2014.[6]

Concierge has also auctioned the most expensive home ever sold in the US, as well as many homes owned by celebrities.[7]

Background: real estate auctions

According to the National Association of Realtors, “The majority of auctions today don't result from foreclosure of distress situations, but rather are the result of a seller choosing a cost-effective, accelerate method to sell a property.”[8]

As a result of the auction process for real estate, home sellers receive the money from their home sales quicker than they otherwise would from a traditional real estate sale. Buyers, on the other hand, are able to benefit from a quick, competitive bidding process.[8]

Overview

The Real Deal has labeled Concierge Auctions as “the market leader in luxury real estate auctions.”[6] The company holds auctions for high-priced real estate. When they auction a home between a seller and a group of buyers, Concierge Auctions also works with local real estate agents. Agents receive 5-6 percent sales commission, which is an average number in the real estate industry. But for buyers, Concierge Auctions charges a 12 percent premium. Auctions range from $2 million to $40 million, but have an average of about $4 million.[2]

The company was founded in 2008 by Chad Roffers, who had owned Sky Sotheby’s International Realty, a Sotheby’s franchise in Sarasota, Florida and Laura Brady, a realtor also from Sarasota.[3] Concierge does not disclose its profit and loss figures.[9] It has an office in New York City, but its main place of business, with 60 staffers, is in Austin, Texas. Brady stated in 2019 that the firm handled $390 million in 96 real estate deals in 2018 after brokering $340 million in 81 deals in 2017.[9] It has partnerships with real estate brokerage firms Sotheby’s International Realty and Engel & Völkers.[9]

In 2019, the Wall Street Journal called Concierge Auctions the “dominant force in the rapidly growing business of selling pricey properties to the highest bidder.”[9] However, approximately 30 percent of houses that go on auction at Concierge Auctions result in no sale being made. Sometimes auctions also result in sales that are lower than what the seller wanted.[2]

Concierge Auctions, LLC is a Delaware-based limited liability corporation. San Antonio, Texas is listed as its principal place of business.[10]

The LLC’s owners (“members”) are:[10]

  • Brady Hogan Investments, LLC (a Florida limited liability company owned by Laura Brady of Texas)
  • CA Partners LLC (a Colorado limited liability company owned by Chad Roffers and Bradlee Roffers of Texas)

Leadership

Chad Roffers is the managing director and chairman of Concierge Auctions. He is a graduate of the University of Colorado at Boulder with a degree in political science.[11]

In 2012, Roffers filed for Chapter 7 bankruptcy in Illinois. His bankruptcy petition listed $13.9 million in debts and $187,522 in assets. After Concierge Auctions “collapsed in 2008,” Roffers “left the area” amidst bounced checks to employees and unpaid bills to vendors.[12]

Lawsuits

Since 2014, Concierge Auctions has been sued in 10 separate lawsuits. In five of these lawsuits, the plaintiffs accused the company of artificially inflating the price of homes, allegedly by using fake bidders, according to Courthouse News by the Wall Street Journal. Four of the lawsuits were still ongoing as of February 2019.[6]

The company has been sued “far more often” than similar companies, according to the Wall Street Journal.[13] Competitors DeCaro Auctions International and Paramount Realty USA were sued by clients only once each since 2014.[9]

Rhonda Hicks (2017)

The company has also been sued by its own real estate agents. One of the company’s African-American real estate agents sued the company, alleging discriminatory practices that resulted in her losing hundreds of thousands of dollars in commissions.[14] Rhonda Hicks filed a complaint against Concierge Auctions in the Houston Division of the Southern District of Texas on September 25, 2017.[15][16]

Fiji home sale (2017)

In 2017, a home seller in the country of Fiji put his home up for auction with Concierge Auctions. In a federal court in California, two real estate investors who came to the auction as buyers sued the company for allegedly “improperly [keeping] their $285,000 deposit after the seller reneged.” The two plaintiffs alleged that Concierge Auctions used fake buyers to drive up the price of the home.[9][17]

In addition to the case against Concierge Auctions, the plaintiffs also sued the company’s attorney, Robert Wolf, alleging that he gratuitously defamed Howard Appel, one of the plaintiffs. In response to the filing of the lawsuit, Wolf allegedly wrote the following statement: “By the way, I know Howard Appel from when I used to head the litigation side at Gersten Savage, more than 10 years ago. Howard had legal issues (securities fraud) along with Montrose Capital and Jonathan Winston who were also clients at the time.  Please send him my regards.”[10] According to analysis of the case published on ConciergeAuctionScams.com, the Howard Appel who sued Concierge Auctions was a different Howard Appel than the one who Wolf said he represented, essentially making Wolf’s statement a case of the same name but different person.[10]

Grand Estates Auction (2013)

In 2013, Grand Estates Auction, which is a competitor of Concierge Auctions, sued the company along with several past Concierge Auctions clients in the U.S. District Court for the Southern District of New York for $23 million per claim, alleging multiple claims of false advertising, deceptive trade practices, tortious interference, mail fraud, wire fraud and violations of the Racketeer Influenced and Corrupt Practices Act (RICO Act).[18] However, Concierge Auctions had already sued Grand Estates Auction before that, with allegations that Grand Estates created fake email accounts to publish “false and defamatory” stories about Concierge Auctions online.[19] In the official case, 4K & D Corp. v. Concierge Auctions, LLC, the judge granted in part, but also denied in part, the RICO allegations.[20]

According to Price Benowitz LLP:[20]

"In 4K & D Corp. v. Concierge Auctions, LLC, the court granted in part and denied in part the civil RICO allegations by Concierge Auctions, an auction house. The plaintiffs had alleged that the defendants fraudulently induced sellers of luxury real estate to enter into auction contracts with Concierge by making false promises and various misrepresentations about Concierge’s auction results, sales statistics, and track records, and that the defendants engaged in other fraudulent conduct such as using shill bidders, allowing bids from unregistered bidders, and adding a reserve at the last minute. As a result, Grand Estates was allegedly harmed because sellers chose Concierge instead of Grand Estates or other auction houses due to the defendants’ misrepresentations to the sellers."

Prime Aspen Property Auction (2020)

On 15 June 2020, In partnership with Seller / Developer Bill Guth of Aspen International Properties and Buyer Seller Steven Shane of Compass, Concierge Auctions is delighted to report that 1055 Stage Road is awaiting pre-auction selling. The property, previously offered for $30 million, went under the hammer in only 14 days, after being listed on the market for 3± years. Concierge Auctions' worldwide visibility culminated in more than 4,800 website / page visits, 900 opportunities, and 21 showings from potential customers.[21]

Additional lawsuits

In addition to the lawsuits noted above, following is a list of other suits brought against Concierge Auctions:

  • Matsuri Foundation of Canada v. Concierge Auctions, ULC, (2017) No. S-178625 (Vancouver B.C., Canada)[22]
  • Concierge v. Bloeser, (N.Y. Sup. Ct. 2011) (no. 108121-2011)[23]
  • Granger v. Crews, D-1-GN-14-000724 (Travis County Dist. Ct. 2014)[24]
  • Concierge v. Kivo, D-1-GN-17-001272 (Dist. Ct. Travis Cnty. March 23, 2017)[10]
  • Robert Troop, et al. v. Concierge Auctions, LLC, et al., Case No. 2011-2018-CV-00174 (Superior Court New Hampshire 2018)[25]

Regulatory action

Prior to 2013, the North Carolina Auctioneer License Board issued a warning to Concierge Auctions for false and misleading advertising.[19]

Financials

In January 2019, Concierge Auctions sold the most expensive home ever sold at an auction in the United States: an estate in Florida that sold for $42.5 million.[6]

In 2018, the company auctioned $390 million worth of real estate.[6] Among the company’s rivals are DeCaro Auctions International and Paramount Realty USA.[9]

In 2018, the company sold $390 million in real estate from 96 separate sales. In 2017, those figures were $340 million from 81 sales. [9] 2017 revenues amounted to $34.3 million, with a three-year growth rate of 90 percent.[4]

Celebrity house auctions

In 2013, Concierge Auctions signed Michael Jordan as a client. Jordan hired the company to auction off his 56,000 square foot home in the Highland Park area of Chicago. The home has 9 bedrooms, 19 bathrooms, a beauty salon, indoor basketball court, gourmet kitchen, stocked fishing pond, and tennis court. The home was originally listed at $29 million.[26][27]

However, Concierge eventually failed at selling Jordan’s house. Two days after the auction failed in December 2013, Jordan put his home back on the conventional real estate market, asking for $16 million (55 percent of his original $29 million asking price).[28]

In 2012, Concierge Auctions signed NASCAR driver Joe Nemechek to sell his 139-acre horse ranch in North Carolina. The deal originally had the property go to auction with no minimum.[28]

In early 2019, the company signed with the estate of the late Wayne Huizenga for his 2o,653 square foot home in Fort Lauderdale, Florida. Huizenga was a co-owner of three professional sports teams in Florida: the Dolphins, Panthers, and Marlins. He was also the only person in history to have started three Fortune 500 companies (Waste Management, AutoNation, and Blockbuster Video).[29]

A few years ago, the company helped Cher sell her home in Hawaii.[5]

References
  1. "Frequently asked questions." Concierge Auctions. Retrieved 2019-09-13.
  2. Sharf, Samantha. "Real Estate Auctions: Concierge Auctions Puts Luxury Homes On The Block". Forbes. Retrieved 2019-07-09.
  3. "Company." Concierge Auctions. Retrieved 2019-09-13.
  4. "Concierge Auctions". Inc.com. Retrieved 2019-07-09.
  5. "Chad Roffers files for bankruptcy protection | August 13, 2012 | Michael Braga | Inside Real Estate". insiderealestate.heraldtribune.com. Retrieved 2019-07-09.
  6. "Concierge Auctions facing accusations of fraudulent bids". The Real Deal New York. 2019-02-11. Retrieved 2019-07-09.
  7. Frank, Robert (2018-11-13). "Bidding is on for the most expensive home ever to hit the auction block". CNBC. Retrieved 2019-07-09.
  8. "Auctions". www.nar.realtor. Retrieved 2019-07-09.
  9. Clarke, Katherine. "Luxury Real-Estate Firm Concierge Auctions Fights Allegations of Fraudulent Bids". WSJ. Retrieved 2019-07-09.
  10. "Concierge Auction Scams | Concierge Auctions | Real Estate Reviews". Concierge Auction Scams. Retrieved 2019-07-09.
  11. "Chad Roffers." Concierge Auctions. Retrieved 2019-09-13.
  12. "Chad Roffers files for bankruptcy protection | August 13, 2012 | Michael Braga | Inside Real Estate". insiderealestate.heraldtribune.com. Retrieved 2019-07-09.
  13. "The real estate market is changing -- read the fine print". The Downey Patriot. Retrieved 2019-07-09.
  14. Gonzales, Philip. "African-American real estate agent alleges discriminatory treatment from Concierge Auctions". setexasrecord.com. Retrieved 2019-07-09.
  15. Gonzales, Philip. "African-American real estate agent alleges discriminatory treatment from Concierge Auctions". setexasrecord.com. Retrieved 2019-07-09.
  16. Houston Division of the Southern District of Texas case number 4:17-cv-02867
  17. U.S. District Court, Southern District of California case number 17-cv-02263-BAS-MDD
  18. (4K&D Corporation d/b/a Grand Estates Auction Company, John Bloeser, Nancy Bloeser, Deborah Jarol and Sherwin Jarol vs. Concierge Auctions LLC, Laura Brady, George Graham, and Michael Russo, Case 1:13-cv-02527-JGK, United States District Court, Southern District of New York)
  19. Jones |, David (2013-04-23). "Concierge Auctions accused of fraud, as court battle between rival housing auction firms heats up". The Real Deal New York. Retrieved 2019-07-09.
  20. "Auction House Civil RICO | White Collar Lawyer | Price Benowitz". Whitecollar Attorney. 2014-04-03. Retrieved 2019-07-09.
  21. "Concierge Auctions Announces Pre-Auction Sale of Prime Aspen Property". EIN Presswire. 15 June 2020. Retrieved 30 June 2020.
  22. "Notice of Civil Claim: Matsuri v. Concierge." Concierge Scams. Retrieved 2019-09-12.
  23. "Complaint: Concierge v. Bloeser et al." Concierge Scams. Retrieved 2019-09-12.
  24. "Granger v. Concierge complaint." Concierge Scams. Retrieved 2019-09-12.
  25. "Am. complaint." Concierge Scams. Retrieved 2019-09-12.
  26. Rodkin, Dennis. "Concierge Auctions Was Being Sued When It Took on Michael Jordan's House". Chicago magazine. Retrieved 2019-07-09.
  27. "Live like Mike: Jordan's home going up for auction". TODAY.com. Retrieved 2019-07-09.
  28. Rodkin, Dennis. "Concierge Auctions Was Being Sued When It Took on Michael Jordan's House". Chicago magazine. Retrieved 2019-07-09.
  29. McMenamin, Emily (2019-03-21). "Late Businessman And Pro-Sports Team Owner Wayne Huizenga Selling His $27 Million Florida Estate Without Reserve". Concierge Auctions Blog. Retrieved 2019-09-13.
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