It makes perfect sense to let buyers fight it out in a bidding war at auction and drive up the price of your property doesn’t it? But, be careful, don’t let an auctioneer take advantage of any lack of knowledge you have. Here’s some general advice we think you should know…
Why sell at auction?
Have you grown frustrated of the time you’ve wasted trying to find a buyer on the open market?
If you’re looking for a quick sale and certainty that a buyer won’t bail on you, then auctions are a good way to go. Once the hammer falls the buyer has to put down a 10% deposit, with the rest given to you within a month.
It’s all about the heat of the chase at auction. Demand from multiple buyers can help quickly drive up the price, especially when they’re all rubbing shoulders in a room together desperate not to miss out on the chance to own your property.
If you’ve an unusual or run-down property you may find it hard to attract conventional buyers but auctions are often attended by expert buyers or people looking for a project who’ll know enough about the market to recognise potential when they see it.
If you need to sell up quickly – perhaps you’re relocating or you need the money urgently – then an auction suit you. As long as there is enough interest and you’ve set a realistic price your property should be sold by the end of the auction.
How much does selling at auction cost?
Expect to pay your auctioneer around 2.5% of the price you get for the property and you also check in advance if there’ll be any advertising costs.
You’ll also need to pay a solicitor to help with the legal side prior to the auction and on the day. Solicitor’s fees vary so shop around for a good price and service.
How do I choose an auction house?
Do your research. Look around. In the first instance check any promotional material for other houses – do you trust these people to show your property in its best light?
An established auction house might be more expensive but it is also more likely to know how to market your property to the maximum number of potential buyers.
However, you might find though that a less well-known company is more helpful and cheaper too.
Don’t let anyone pressurise you into going to auction
You don’t have the runaway bride option. The sale is binding from the moment the hammer falls and you sign and exchange contracts there and then. So there’s no time for second thoughts or cold feet – if you think an agent is pressurising you, then step back and speak to your solicitor.
How do I set the reserve price?
Your reserve is the lowest price you’ll accept – a figure privy only to you and the auctioneer. If an offer doesn’t come in to meet this figure, the auctioneer will withdraw the property from the auction.
If someone offers your reserve price or above the auctioneer will drop the hammer and you won’t be able to back out, so think about the price you set very carefully.
If your house has been on the market already and you haven’t had any offers for the price you wanted, maybe you’re being unrealistic and you need to lower your expectations before going to auction.
Don’t worry if you realise you’ve set your reserve a bit too high, you can still negotiate with a buyer after the auction.
How do I set the guide price?
You can be a bit sneaky with this and it’s something your auctioneer will help you with – basically, it’s the price that the public is allowed to know and you can use it to lure buyers in. It’s just an idea of what the house is worth, so even if you put it lower than the reserve you won’t have to accept it.
What else should I do before auction?
The auction house should be doing their best to market your property but never trust your agents to do all the work for you. If the right kind of buyers aren’t in the room on the day you could lose out.
It’s in your interest to make sure the property is looking its best and open for viewings from perspective buyers in the weeks leading up to the auction.
Spread the word. Make sure the news gets out to as many potential buyers as possible. Publicise your property to your family, friends and colleagues, on social media…shout it from the rooftops.
How quickly will the sale proceed after auction?
It might take just a month to go up for auction, but the sale could be completed within 28 days. Our blog post on the right way to move house can explain the things you need to keep in mind when moving out quickly.Back to all articles