Selling a property at auction
Posted on 25th March 2022
Today, selling property at auction is becoming an increasingly popular business.
Not only can it be much more profitable than selling privately, but also the risks involved in selling a property via an auction are far less than when selling privately.
In the UK, it is sometimes said that auctions equate to "instant sales".
This means that once a property has been sold at auction, there is no chance of the sale falling through and having to be re-listed for sale; something which can happen with privately-sold properties all too often. This can help to reduce your risk of not being able to sell the property, which would result in you losing even more money.
Overall, there are many reasons why selling properties at auction is becoming so popular throughout the UK. It is not only a quick and efficient way to sell, but it also has major benefits such as the lack of risk that comes with selling privately.
There have been many occasions when a property has not sold on the open market, and then sold at auction for far more than was expected. The main reasons as to why a property may not have been successful on the open market could be due to many different factors, which is something that an auction solution would avoid.
Typically, properties that need some work doing on them are more likely to sell at auction than via another means.
This is because the buyer knows what they are getting themselves into, and there are no concerns about buying a property sight-unseen.
Properties which have had bad survey results, need some work doing on them or simply don't show themselves off to their best advantage are the most likely to sell at auction, as it is a more efficient and cost-effective way of selling.
However, there are some downsides such as potential buyers typically needing large amounts of cash at hand, which can be difficult for people who would like to buy your property. Despite this though, the benefits of selling at an auction clearly outweigh the downsides and it is becoming more and more popular due to this.
If you would like to sell a property in the UK, whether it be commercial or residential, I strongly recommend having a look at how you can sell via an auction; we have put together some helpful guidelines on our website to help you with this.
Once you have decided to sell at auction, the process is slightly different to when selling on the open market. You will need to instruct a solicitor to collate a legal pack, which will then be advertised for buyers to see.
This is where you need to inform them of when and where the auction is taking place, as well as when you expect the sale to be completed. It is also worth noting down who pays for what and any other important information that could come up throughout the process.
Once this is done, the property will be entered into the auction with a Guide Price and a Reserve Price, which is the lowest price you are willing to accept for your property.
As long as the property sells above this Reserve Price, then that is it, the property is gone; however, if the auction does not match or exceed your Reserve Price then that is when you will need to start thinking about whether or not you want to sell and what sort of offer would be suitable.
It is very important to put the correct Guide price on your property as this is how the property will attract the strong interest of buyers. As a seller, you need to make sure that your Guide Price is achievable and realistic as this will attract a lot of interest from buyers and encourage them to come along on the day.
The fees for selling at auction can be paid by either the buyer or the seller and this is something that you should discuss with your estate agent or auctioneer. Generally, it is more common for the buyer to pay these fees as long as you do not set your Guide price too high.
In addition, you should not have to have a deposit with an auction house unless this was agreed in writing prior to the sale going ahead.
If you are interested in learning more about the benefits that come when selling via an auction, such as the speed of sale and the fact that you cannot fall through on a deal, then please do not hesitate to get in touch.
We can help with all aspects of selling at auction and would be happy to provide more information about this process and guide you through it.
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Tagged as: Auction
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