How To Sell Your House At Auction
And Choose An Auction House
This article will help you understand:
- How much it costs to sell your house at auction.
- The process and how it works.
- How to choose the right auction house for your property.
Increasing numbers of people are looking at auction houses to sell their properties quickly.
This is due to the popularity and demand for auction properties, which can sometimes lead to the price being driven up. Buyers love auctions too – they're fast, exciting and relatively straight forward.
Whatever the reason, selling your house at auction can be a great alternative to the traditional route of selling through an estate agent.
Frequently Asked Questions
About Selling At Auction
Auctioning your house can be one of the most expensive ways to sell a home.
There are no hidden costs, but an auctioneers commission currently stands at around 2% - 2.5%+VAT of the home's value, and if your property does not sell at auction you will still have to cover the auctioneers costs.
- Cash buyers
- Immediate exchange of contracts
- Full marketing
- Money to pay upfront
- Commision when property sells
- Property may not sell
- Often won't get the best price
You could choose an auctioneer that's near to you. However, some auction houses specialise in certain types of property.
You could do some research into which auctioneers have sold similar properties to the one you're selling. Ring around a few to see who sounds most helpful.
You may also want to watch our video about choosing an auction house.
It depends on the contract, but between 14-28 days after auction is usual - assuming the property sells.
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What Are the Benefits of Selling a Property at Auction?
And The Type Of Properties You'll Find
When putting your home up for auction, you've got to ask yourself if your property suitable for the auction process.
Auction rooms tend to attract buyers who are specifically after a refurbishment project or reasonably priced property.
You'll also find properties such as bank repossessions, probate sales and problem properties that you just can't seem to get a valuation on.
Other circumstances could be that you simply need a quick house sale due to unforeseen events such as a job relocation, inheritance or discovery of a structural issue that may make your property tricky to sell.
The Process Of Selling At Auction
How To Choose An Auctioneer & Preparing For The Day
When you decide to sell at auction, you will need to choose a suitable auctioneer.
There are many to choose from, some specialise in auctions only, you can also make use of an auctioneering division within an estate agents.
Of course costs, reputation and process will slightly vary when choosing an auctioneer.
We would suggest a budget of around 1.5% - 2.5% of the sale price as the costs.
Sometimes you are also required to pay for advertising and legal costs, often in advance of a sale so consider the option carefully before you spend.
Using more established companies could be beneficial as they will have the largest database of potential purchasers, meaning more people will potentially see your listing in advance to auction and hopefully lead to a more successful price.
Your next step would be to instruct a solicitor to prepare contracts, the legal pack and any special conditions that you require for the upcoming sale.
Choosing An Auction House When Selling
Choosing the right auctioneer is crucial for when your selling your property, it could be the difference between a good and a bad price or even the property selling or not. So, do your research.
Personally I would consider using a London auctioneer if the property was right for it, because that's where a lot of the investor buyers live and are based. You could find that, that works well for you.
However, if your property is more in the provinces, a lot of the local buyers, who are your key market, might not be willing or able or aware of London auctions. So, you might want to consider putting it with a local auctioneer, who after all will probably know the market in your area much better.
Whichever auctioneer you do choose, make sure that they're going to instruct a local estate agent to carry out viewings, because that agent will help to spread the word of the property to investors and buyers that they know and also that they put up a for sale buy auction board, which generate a massive amount of interest wherever the auction's located.
Of course, in the days of the internet now, on smart phones and so on, people can very quickly see a board and look up the auctioneer wherever they are.
So, you want to get your property out to as many people as possible in order to get the best possible price and to do that, it's a board, a good auctioneer and make sure that you've done your research.
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Setting The Reserve & Guide Price
The reserve price is crucial, it's very important to get this right as once the price has been matched, the property will be sold and there is no going back!
Next you’ll need to set a guide price, remember make this attractive to buyers as you don’t want to scare people off with an outrageously high starting price, but also don’t be too unrealistic with a low guide price.
If your house doesn’t make the reserve price, don’t worry - you can also accept the last bid price and the auction terms and conditions still remain – assuming that the bidder is still willing.
Preparing For Auction Day & Offers Before Auction
Once the auction house has produced the catalogue, you should be ready for viewing arrangements to be made - when interested parties can come and view your property.
As ever when trying to sell your property, ensure that it looks as good as possible.
Potentially you will get offers before auction, this is fine and it is completely up to the vendor (you) if he/she accepts the offer or not.
This could be seen as risky as you never know how much you will achieve at the auction room, it could be less or it could be more.
On The Day Of The Auction
When the big day is upon you, you don't have any obligation to attend, but we would strongly suggest going along!
It's a great experience and can prepare you for the next time you use an auction house.
Hopefully your property will sell, however if your property fails to meet its reserve price don't worry as you can negotiate a deal lower than the reserve with the bidder.
The auction house terms and conditions still remain the same and the deal can go forward.
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Selling At Auction Hints & Tips
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