Selling your house at auction:
how it works
This article will help you understand:
- How much it costs to sell your house at auction
- The process, how it works and how to save your money
- 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.
What are the benefits of selling a property at auction?
When putting your home up for auction, you’ve got to ask yourself if your property is 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
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.
Selling a house at auction can cost up to £1200 plus VAT for a solicitor, with 2.5% of the house value on top of that for the auctioneer fee.
So we would suggest a budget of around 1.5% – 2.5% of the sale price to cover costs.
Sometimes you are also required to pay for advertising and legal costs, often in advance of a sale so consider this 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 who will see your listing in advance of the 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.
Auction house companies in the United Kingdom
Some auction house companies in the UK include:
Setting the reserve & guide price
When putting your home up for auction, you’ve got to ask yourself if your property is 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.
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) whether you accept 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 if you decide to use an auction house again. You should also consider going along to an auction before selling your home using one.
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 nearest bidder.
The auction house terms and conditions still remain the same and the deal can go forward.
Other ways to sell your property
If you are thinking about selling a property through an auction because you need a quick sale or you can’t sell your property on the open market you should also consider using a property buying company such as House Buy Fast.
We buy property in a poor state of repair, with short leases or from people who need to sell fast for a variety of reasons. We can complete the sale in days, weeks or to a timescale of your choice.
How to choose an auction house company
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.
Video transcription
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.