Selling a house at auction
Introduction to selling your house at auction
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A brief guide to selling your house at auction…
There are many misconceptions about selling houses at auction, it’s often thought of as being too complex or risky for the average homeowner. The truth is that auction is an extremely simple way to sell your house. This brief guide is intended to provide those new to the idea of selling at auction with an introduction to the main points.
Last updated by Mark Grantham on 14th January 2017
Costs for selling your house at auction
The fees payable when you sell a house at auction are about the same as an estate agents; around 2% of the sale price, and that’s only paid if the property successfully sells. It’s possible to pass all (or part) of that cost on to the buyer, in fact it’s not all that unusual. Some buyers will not bid as high for the property if they spot the clause in the legal pack, but for others it won’t affect their bids. Most auction companies also charge a “catalogue fee” of about £300 and will usually be happy to postpone payment until after the auction, also only payable if the property sells. So it is possible to sell at auction on a “no sale, no fee” basis, with the buyer paying all sale fees.
What price will your property sell for at auction? Request a valuation and auction estimate for your property and find out more about selling at auction.
To find out more about house auction costs and how to negotiate the best rate, read our guide to property auction costs.
It’s usual to set a minimum price (known as the reserve price) of around 85% of market value. The attractive price stimulates buyer interest. It may seem a bit counter-intuitive but it does work; the more prospective buyers there are bidding for a house, the higher the final sale price will reach.
However, the reserve price does represent a risk; if only one person bids for your house you could end up selling for the reserve price, which would not be an ideal outcome. There are ways to reduce this risk, as experienced auction sellers (e.g. asset managers working on behalf of banks) know very well. Choosing an auction company suited to your property type and location is an important start. Also monitoring the level of interest in the house (number of legal packs downloaded, viewings, registered bidders and offers before the auction) is also important. As a safeguard a good auctioneer will alert a seller to a low level of interest and if need be the house can be withdrawn from auction.
“One of the benefits of selling your house at auction is that you’re not setting an upper limit on the sale price”
Timescales for auction sales
The total lead time for selling at auction is around 8 weeks. That’s from the time the house is booked into auction until the time the sale completes – when you receive funds and hand over the keys.
Thinking of selling?Try our free auction sale price calculator
Property types – is your house suited to sell at auction?
Any house can be sold at auction but some property types are more suitable than others. In fact some houses achieve higher sale prices at auction compared to selling through an estate agent, for example houses and flats with potential for improvement or development always generate a high level of demand and benefit from the competitive bidding environment that auction offers.
Find out more about auction reserve prices and why they’re so important!
Process for selling a house at auction
Contrary to popular belief, selling a house at auction is very easy. Entering a house into auction just requires instructing an auctioneer and responding to some basic enquiries from your solicitor. If you’re interested to know what happens in the run up to the auction sale, we’ve provided a fuller explanation of the auction process.
Choosing an auctioneer for a successful house sale
It’s no coincidence that highly profit-driven companies such as mortgage lenders and banks dispose of their property assets through auction – to achieve the highest possible price. When choosing a suitable auctioneer it’s a good idea to see if such organisations regularly instruct sales with auction company, if they do then you know they’re tried and tested.
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