Looking to sell a house at auction? It can be a good idea if your property has structural issues or any other problems that could prevent it from selling on the open market.
Below is a rather large article around everything you need to know about selling a house at auction and whether it's right for you, but here are a few of the highlights:
How Long Does It Take: The selling a house at auction process is roughly 6-10 weeks
Selling a House At Auction Cost: Typical 2.5% of the property sale price
Is Auctions Right For Me?: Well, it depends! There's a lot too it
Quick cash buying companies, like ours, can buy any property and prevent the cost of selling a house at auction. We'll buy the house in any condition and will save you the hassle of having to sell your property yourself.
There are several things to remember when you are considering selling a house at auction route.
To help you understand how the whole process works, we’ll walk you through it:
Fees - the auction house will take a cut from the sale of your property and this will be around 2.5% of the property price
Choose the right auction house - do your research and find one that specialises in house auctions and has a good reputation
Accept offers in advance - this is legal and is a way to get a quicker sale and a price you’re happy with
Set a reserve price - this is the seller’s minimum acceptable price at auction and the figure below which the auctioneer cannot sell. It may be up to 10% higher than the guide price and remains confidential between the seller and the auctioneer
Set a guide price - this is a value that gives buyers a general idea of how much the seller wants. Selling a house at auction is a gamble so the final selling price could end up being higher or lower than the guide price
Prep your property for a viewing - do some basic DIY, tidy the garden and de-clutter. Even if your property has structural issues, you’ll do better at in your auction property sale if you show it in its best light
Self-advertise - use social media to get your property in front of as many people as possible for free. You could even take out an ad in your local paper
Auction day - if you decide to attend then get there early, stay calm and hope for the best. If your property doesn’t hit its reserve then you may have the opportunity to seal a deal after the auction with a potential buyer
Buying & selling a house at auction is relatively straight forward, but if you’re new to auctions then we’ve got some information to offer you an insight into how the process works:
The types of properties sold at auction are usually problem properties. By this we mean properties that have been repossessed, require renovations, are difficult to value or are unusual.
Picking your auctioneer
Whether you’re selling via a traditional estate agent or you’re selling a house at auction, you need to do your research first. Shop about, read reviews and be informed before picking an auction house.
Setting the price
Agree your reserve price with your auction house. This amount isn’t shared with bidders because it’s the lowest amount you would be happy to accept for the property.
The guide price is the amount that bidders will see and gives potential buyers a guide as to what the property is worth.
Before the auction
Make sure your solicitor is on stand-by so give them plenty of notice to prepare the relevant documents. Find out what the fees will be from your auctioneer so you don’t get any nasty surprises.
Make sure the auctioneer has advertised your property in a variety of ways i.e. a glossy brochure and newspaper adverts, as well as online to get more exposure.
Your auctioneer will inform you if anyone has put in an offer prior to the auction taking place.
You must let your auctioneer know if any changes occur, either to the property or its circumstances so they can make the required amends.
On the day
Time will be set aside for potential bidders to enquire about any last-minute changes. If there are any changes, the brochure will be updated.
Hopefully you will get a buyer and they must pay a 10% deposit there and then so that contracts can be exchanged.
Then you must pay your fees to the auctioneer. If your property doesn’t hit its reserve then you’re able to approach the highest bidder via the auctioneer or your solicitor to negotiate a deal with them.
The whole process of selling a house at auction takes around 28 days, but it might be sooner, depending on if you accept an early bid or a buyer settles their remaining balance faster than expected.
If you want to sell property at auction fast, remember the tips we gave you above about presenting it in it's best light!
Very easy &
can't recommend enough
Selling a house at auction can be a relatively quick process, you're looking at anywhere between 6 to 10 weeks as long as your house sells during the auction of course, this also depends on how long it takes for the auction house to actually put the house up for auction.
As long as you set a reasonable asking price and reserve then you hopefully shouldn't have an issue in getting the ball rolling on your sale.
No - not necessarily.
Those who buy from property auctions are typically looking for a different kind of property than the open market, but if your property is suitable for the auction you could well get what you expect.
It depends on the auction and the interest on the day as to whether you are able to drum up a bit of a bidding war, but that is something an auctioneer should be able to provide help on.
People who buy property at auction are usually more savvy than your traditional buyer, which is something to take into consideration.
If you’re considering selling a house at auction then it is really important to weigh up the pros and cons of this service.
|✔ Quick sale - properties bought at auction often complete in 28 days, so you could have your next project on your hands within just a few weeks.||✖ Sale isn’t guaranteed|
|✔ Chain-free - immediately after an auction, contracts are exchanged and you're legally bound to buying the property. This means that no-one can offer higher and take it off you. During the auction you'll see what other people bid for the lot, so you won't have to decide if you trust an estate agent saying what others may have offered.||✖ Uncertainty over how much over your reserve price you’ll make until the auction actually takes place|
|✔ Competitive – you could get a great price for your property if it is marketed to create a buzz||✖ High fees – entry fee as well as possible commission fees once the auction completes|
|✔ You keep control because a buyer can’t legally pull out||✖ You’ll need to move out quickly because the completion time is only a matter of weeks|
|✔ Property investors - many investors go to property auctions in the hopes of grabbing a bargain. This often comes in the form of a property much in need of repairs. Property investors who can afford to do up a house can sell it on for a profit. Other people purchase properties with a view to let them.||✖ All sales are final so you may feel disappointed if you don’t get what you expected and you can’t back out should your personal circumstances change|
There are alternatives to selling a house at auction. Quick cash buyers can buy any property, in any condition and for a fair price.
Selling a house at auction could cost nearly £1200 plus VAT in solicitor’s fees and then the selling at auction fees are on top of that, at around 2.5% of the final sale price of the property.
Even if your property doesn’t sell, you’ll have to pay the auction fee. The Property Buying Company covers all legal fees and doesn’t charge commission, meaning that the amount we offer you is the amount you’ll receive.
It can be tricky trying to choose an auction house to sell your property with, there are so many to choose from!
Who you choose to go with depends on what you are trying to sell, there are sometimes specialist auctioneers for your particular property, especially if it is quite unique.
That being said your best option is usually to go with a larger auction house as they tend to have a bigger database of investors that they can outreach to immediately, according to NetHousePrices.com here are some of the top auction houses that cover most the UK:
Setting the right guide price is key to getting a quick sale through an auction.
The guide price is the price that the public are aware of and you should use it to capture the attention of as many buyers as you possibly can.
Your auctioneer should give you a steer on this but it all comes down to what you think the market value of your house is.
It's just to provide an idea of how much the house is worth and even if you put it lower than your reserve you don't have to accept any of the offers.
If you are still unsure then you can visit our "How much is my house worth" page for more information.
The reserve price is simply the lowest price you will be able to accept - it completely depends on your situation but again this is something that your auctioneer can help you with.
If all the offers you get on your property are lower than this then your property will be withdrawn.
Think long and hard about it though, if someone offers your reserve price then the hammer will drop and you can't drop out at this point!
If you get your reserve wrong and nobody offers high enough, don't worry. After the auction has finished you can still negotiate with any of the buyers at the auction.
Before your property goes to auction it will be marketed to buyers via the auctioneer and you could potentially get a number of viewings prior to the auction day.
At this point you will sometimes find that potential buyers make you an offer before the auction and it is then up to you as to whether you want to take that or risk going to auction.
It would be wrong for us to say whether you should accept this offer or not because it depends on your personal circumstances, if you want a quick sale as a priority then you may want to accept it, however if someone is making an offer prior to the property going to auction it often means that they think there will be a high demand for it so they're trying to prevent a bidding war.
If a property doesn't sell when it goes under the hammer then it will usually be withdrawn from sale.
If there has been any interest from people at the auction, the auctioneer will usually see if they want to post a bid after the auction has ended.
If there's been bids below the reserve the auctioneer will put these forward to you in order for you to decide whether you want to accept it.
If there's no interest, you might have to look at an alternative option as opposed to selling a house at auction.
Although a number of properties can do well at auction, it is a gamble. If you don’t meet your reserve then you’ll still have to pay the selling at auction fees and sell your property.
Always seek advice from the auctioneer before agreeing to sell your house via this platform. They are experienced enough to let you know if your property is likely to sell and for how much.
Don’t go ahead with it if you feel uneasy about anything and if you need a quick sale of your property remember that there are other options available to you.
After reading all the above, do you perhaps think that auctions aren't particularly your best option?
Well you might be curious as to find what other options you have available, here are your main choices:
Estate Agents: This is the most traditional way of selling your home. It involves an estate agent visiting your home, valuing it and putting it on popular property portals and waiting for enquiries. This method is typically quite slow in comparison to auctions and other options. Estate agents will also charge you a fee which is either a percent of your property or a flat cost when the sale is complete.
Private Sale: This is when you sell your house yourself. It means you putting in the leg work and using your network of connection in anyway possible to sell your home, this will save you the estate agent fee.
Part Exchange: This will only work for some as it tends to only be offered if you're buying a new build. The new build company itself will offer to buy your home if you buy theirs in exchange. This however is often done at significantly below market value.
Selling a house at auction can be a great way to get rid of a problem property and it can be pretty exhilarating.
However, if you want to guarantee the quick sale of your property then a quick cash buyer could be a better option. The Property Buying Company will offer you a fair cash sum, will complete in a timescale to suit you and will include all legal fees so there are no hidden extras to worry about down the line. What’s even better is that no property is off-limits, even ones that are in need of a lot of renovation or repair.
The property will then be withdrawn from the sale and the auctioneer will ask any interested bidders to speak to them afterwards in which point they can make a bid directly to yourselves.
No, not unless the bid is over what you set as your reserve price. As soon as the offer goes above the reserve then the highest offer will be accepted.
It depends upon which auction option that has been selected and the auction house you choose however generally speaking you are looking at anywhere between 28 - 56 days.
You will need to talk to your chosen agent about this, they can advice you accordingly.