Selling Your House at Auction

When you see residential properties going under the hammer on TV, you might wonder if that's really how house auctions work. Why do people opt for this method of selling? Auctioning a house involves a more intricate process than meets the eye, yet it offers homeowners the potential for a quicker sale.

Let's delve into what it entails to buy and sell at property auctions, the associated costs, benefits, drawbacks, online property auctions, and whether it's the right choice for you if you're considering selling your house this way.

Understanding House Auctions

A house auction is a meticulous process that unfolds over several months. An auction house compiles a marketing catalogue, typically published two to three weeks ahead of the auction date.

Prospective buyers can arrange viewings of the auction properties and even conduct early-stage surveys to assess any structural issues. Open houses may be scheduled, and buyers can request a comprehensive legal pack for deeper insights into the legal particulars of the property.

Each property is assigned a guide price in the catalogue, representing its estimated market value. Sellers can set a reserve price during the bidding process, which is the minimum price they are willing to accept and is often kept confidential from potential buyers.

Is Auctioning Your House Feasible?

Not every property is suitable for auction. However, if your property might be challenging to sell on the open market, an auction could be a viable solution. For instance, a rundown property might deter private buyers but attract investors or developers looking for opportunities.

The Auction Process

If you choose to auction your house, you'll need to select a reputable auction house to handle the sale. Opt for an auctioneer who is a member of the National Association of Valuers and Auctioneers (NAVA) for adherence to industry best practices.

Auctions can be conducted in-person or online, with online auctions gaining popularity due to convenience.

On auction day, potential buyers receive bidding numbers for identification during the process. Those unable to attend can submit proxy or online bids. The winning bidder typically pays a 10% deposit on the sale price on the day of the auction, with the remaining 90% due within 28 days.

Costs Involved in Selling at Auction

It's important to note that auction fees can be substantial. While costs are transparent, sellers should carefully consider whether auctioning their house is cost-effective. Here's what you may expect:

• Entry Fee: A flat fee paid to the auction house for listing your property.
• Auction Commission: Typically around 2.5% of the sale price plus VAT.
• Auction Legal Pack: Includes essential legal details prepared by your solicitor.
• Conveyancing Fees: Charges for conveyancing services upon sale completion.
• Legal Fees: Standard solicitor administration costs.
• Stamp Duty and Other Taxes: Consideration for buyers regarding purchase costs.

Online House Auctions

Online property auctions have surged in popularity, especially amidst social distancing measures. They can run continuously or as scheduled events.

Post-Auction Scenarios

If your property doesn’t sell at auction, it can still be sold post-auction through negotiation with interested buyers.

Is Auctioning Right for You?

Consider auctioning your house if:

• You need a quick sale.
• Your property requires significant renovation.
• There's commercial demand for your property.
• Your property has niche appeal.

Benefits of Property Auctions

• Chain-free sale.
• Completion within 28 days.
• Ideal for properties needing renovation.
• Potential for competitive bidding.

Drawbacks of Property Auctions

• Liability for fees even if the property doesn’t sell.
• Higher auctioneer commissions.
• Immediate move-out required upon sale.

Advice for Selling at Auction

• Set a realistic reserve price.
• Ensure accurate property listings.
• Choose a reputable auction house experienced in selling your property type.
• Present your property in its best condition for viewings.

Get an Initial Market Appraisal Today

If you're considering selling your property and auctioning isn't the right fit, consider butters john bee for a seamless sale process. Our property professionals can assist you in achieving the right price at the right time. Contact us for a free initial market appraisal and discover our streamlined selling process today!