It is no secret that the modern method of auction is becoming an increasingly popular way to sell a house. More and more people are choosing to auction their homes, and for good reason! This guide will take you through all the steps involved in selling your house via a modern auction. We’ll compare it to other methods of sale, and show you that it is not as difficult as it seems. So what are you waiting for? Sell your house today!
The benefits of selling at auction.
Selling a house can be time-consuming. We all know that. According to a leading property portal, it could be as long as 25 weeks. The timeline of selling a house is also uncertain – you could get lucky and receive an offer quickly or it may take weeks. Also, potential buyers coming in for viewings can be disruptive to your daily routine, especially if you’re already in the process of buying another home. The most significant advantage of a modern method of auction is that it saves time.
If you need to sell your property quickly and don’t want to wait, the modern auction method may not be as fast as you’d like. Professional property buyers may come in handy. They have a sweet spot when it comes to timeframe, as they can help you move on as quickly as you need to. Some are known to complete the transaction within a day! Although you won’t get 100% of your home’s value, they will pay for all associated expenses and fees.
Did you know that there are no fees when selling to professional property buyers?
The traditional method of auction
What is a traditional method of auction? It is the more common and well-known way of selling – whether is a property or an antique table the principle is the same.
You would engage with a specialist estate agent who would liaise with the auctioning house. Your property would be advertised along with the guide price online and in the auctioning catalogues.
Before deciding whether you want to bid or not, do your research. Check the neighbourhood, and most important view the property. Photographs can be very deceiving. If the property is old and dilapidated, it may be a good idea to bring a builder with you while viewing so you can get an expert evaluation of the house’s construction.
If you found the house you like and you’re happy with it needs doing, request the legal pack (that should include searches). Depending on the region and property, legal documents may vary, so it’s best to have a solicitor investigate them.
With experienced eyes, they will catch any mistakes that could end up being costly. Finally, establish a maximum spending limit. Auctions are all about hurry and excitement; if it’s your first time at an auction, it might be a bit overwhelming, so prepare to act quickly while keeping a predetermined budget and avoiding going over it.
If the competitive bidding is not for you but you want to bid on the property you can ask a solicitor or an experienced estate agent to do it on your behalf.
If auctioning house permits it could be done remotely – online or via phone.
If you won the auction it is legally binding.
Now you need to pay the deposit and you have 28 days to finalise the transaction. Any delays are penalised.
A guide price is different to a reserve price. The guide price is the level where the auctioning house expects bidding to start, whereas the reserve price is the minimum amount that the vendor will accept
If you decided that the best course of action for you is selling a house via a traditional auction, the first step is to find the right auctioneer.
The second step would be to engage with a specialist estate agent who has experience in properties similar to yours.
They will help you set the right guide price and give you an estimate of how much your property could sell for at auction.
It’s essential to have your property valued by at least three different estate agents to get an accurate estimation.
The third step is to sign the contract with the auctioning house and pay their fees.
Now your property will be advertised along with the guide price online and in the auction catalogues.
You will need to prepare your home for people viewing your property.
First impressions count, so make sure your house is presentable.
If you have any pets, it’s best to find a friend or family member who can take them for the day during viewings.
It’s also worth considering hiring a professional cleaning company to deep clean your property before any viewings take place.
You should also declutter your home as much as possible. (You can find more tips and tricks on how to sell your house quickly here.)
The fourth and final step is the auction day itself.
On the day of the auction, you will need to be available to answer any questions that potential buyers might have.
You should also make sure that you have a solicitor present on the day of the auction in case any legal issues arise.
Once the auction is finished, you will need to sign the contract and pay the deposit if your property is sold.
If your property doesn’t sell at auction, you will need to re-evaluate your options and consider whether it’s worth lowering the price or taking your property off the market altogether.
All properties are suitable to be auctioned, the rumour has it that the property needs to be in a bad condition to be accepted by an auctioning company – that is not the case. every type of property from modern flats to family homes can be sold this way.
What is the Modern Method of auction?
First and foremost the biggest difference is that you can buy or sell your property while comfortably sitting on the sofa. You do not need to be at the auction house in person, you can do it all remotely. It’s less intimidating and less stressful. On top of that because it’s an online event it will attract not only the local crowd but buyers and investors from the whole of the UK and possibly abroad. That increases the competition and can drive up the achieved price.
It offers many benefits for both buyers and sellers.
It provides a transparent and fair way to purchase a property. It also means that you can avoid paying any hidden fees or charges.
It provides a quick and hassle-free way to sell your property. It also gives you the peace of mind that your property will sell for the best possible price.
So how does it work?
The modern method of auction is a type of auction that is conducted online.
The auctioneer will list the property on their website and potential buyers can place bids on the property.
The highest bidder at the end of the auction will win the property.
If you are a buyer, you will need to pay a deposit when you place your bid.
This deposit is usually around five to ten per cent of the purchase price.
If you are the highest bidder at the end of the auction, you will need to pay the balance of the purchase price within 56 days.
You will also need to pay any Stamp Duty Land Tax that is due on the property and Capital Gains Tax if applicable.
The advantages of selling your property at a modern auction:
– You are in control of the sale of your property from start to finish.
– You can set the reserve price, which is the minimum price that you are willing to sell your property for.
– The modern method of auction is a quick and hassle-free way to sell your property.
– It is transparent, what you see is what you get.
– High likelihood of selling
-Buyer is usually responsible for paying the auction fees.
The disadvantages of selling your property at a modern auction:
– Most auction houses have an entry fee, which is usually around £500.
– If you’re selling a mortgageable property you may not achieve as high of a price as you would selling through an estate agent
– If your property doesn’t sell at auction, you will need to re-evaluate your options and consider whether it’s worth lowering the price or taking your property off the market altogether.
-Buyer can still back out after winning the bid
-Would not work if you are in a chain
How much does it cost to sell a property at a modern auction
- auction entry fee if applicable – up to a £1000
- auction pack – (contains all the legal documents – floor plans, lease details, surveys, searches, contents report, HM Land Registry documents, valuation reports)
- auction fee – usually up to 3% of the value of the property
A modern method of an auction for years has been stigmatised. The truth is that in comparison to a traditional method of auction it is possible to sell and buy a property that is not classified as problematic, meaning it is mortgageable and structurally sound and the seller has chosen this method because they want a quick sale.
The most popular online auction portal, eBay, has been using the modern method of auction since 1995.
Comparison – modern vs traditional auction
Frequently Asked Questions
Is the modern method of auction a good way to sell a house?
The modern method of auction is a good way to sell a house if you are looking for a quick and hassle-free sale. It is also transparent and fair, meaning that you know exactly what you are getting from the sale.
Why would a house be sold by modern auction?
The modern method of auction is often used to sell properties that are mortgageable and structurally sound. It is also a good option for sellers who are looking for a quick sale.
Is it a good idea to sell a house at auction?
Whether or not you should sell your house at auction depends on your personal circumstances. If you are looking for a quick and hassle-free sale, then selling at auction may be a good option for you. However, if you are not in a rush to sell and would like to achieve the highest possible price for your property, then selling through an estate agent may be a better option.