Property auctions are an increasingly popular way for people to buy and sell their homes, and there are dozens of auctions across the UK every month. In the past, selling a house at auction were mainly appropriate for investors and developers who were looking for projects and profits, however these days the process has become much more mainstream.
Should I sell my house at auction?
If you decide that you want to go ahead and sell a house at auction, the first thing you need to do is find the right auctioneer. Compare different auction houses to see how they’re likely to market your property, and check how much experience they have with selling property in your area. You might pay more to go with an established auction house, but they should offer plenty of experience when it comes to getting you the best price. On the other hand, you may prefer the service you get with a less well-known house, who could offer you their services for less.
How much does it cost to sell a house at auction?
Typically, auction houses charge a commission of around 2.5% of the selling price of your property. This is potentially more than many high street estate agents, but it’s worth working out what you’ll pay if you’re looking at alternative ways of selling your house. In addition to the commission, you may also have to pay an administration fee, advertising costs or entry fee, which could be in the region of £300 – £400.
Most auction houses provide buyers with an information pack that will have things like legal documents and title deeds in it, so it’s best to find out how much you have to pay for these on top of the other costs. It’s also worth remembering that you’ll still have to pay the auction fees even if your sale doesn’t go through.
Aside from the auction house, you’ll also need the services of a conveyancer or solicitor, just like with a private sale. You should include the cost of this in your budget, as your conveyancer will help you with the legal side of things before your sale, on the auction day, and afterwards too.
Setting a guide price and reserve
The auctioneer will help you with the guide price, which gives potential buyers a rough idea of what the auction house thinks the property will sell for. You don’t need to worry too much about this, but you do need to think carefully about the reserve you set. This is the minimum price you’re prepared to sell your home for, which is kept private between you and the auctioneer. If the bidding reaches your reserve, your property is now sold – there’s no backing out. This is why you need to choose your reserve wisely, and don’t worry too much if you feel that you’ve set it too high, as there’s always the possibility you can negotiate with a bidder after the auction.
Should I accept an offer before the auction?
As your property’s advertised through the auction house, and there’s the chance that lots of people will go to view it, it’s very common to receive offers prior to auction. A potential buyer might be keen to secure a deal before it goes under the hammer, leaving you with a decision to make.
Obviously, you need to weigh up how good the offer is, and whether it meets your expectations. It’s also worth considering that you’ve already paid the fees and costs involved, and the reason why the buyer wants to snap it up. This is probably because they think it’s going to go for much more at auction, so they want to wrap up a good deal. If you decide to proceed with the auction anyway, the offer you received could help you to set your reserve.
How long does it take to complete after auction?
One of the major draws of selling at auction is that the process is quicker than usual – the sale should be completed no later than 28 days after the auction. This means that your house could be sold less than two months after deciding to put it up for sale with an auction house.
Disclaimer: Please note the article above is only a rough guide to give you some idea of the process involved in property auctions and conveyancing.