A property auction presents the opportunity to secure a quick sale on a house. But it’s important that you have a good idea of the processes involved to ensure you’re able to get the best possible deal.
There are a number of reasons that an auction can be an attractive proposition to a seller, perhaps key among which is the speed at which a deal can go through. Once the gavel falls, the buyer must immediately stump up a 10% deposit. The remaining 90% is normally paid in full within 28 days – ideal if you’re in a rush to sell.
When multiple buyers are particularly keen on a property during an auction, competition can quickly drive up prices – great news for the seller. Of course, this is far from guaranteed at an auction, so it’s important to set a good reserve price (a topic we cover below.)
Auctions are often attended by expert buyers or people on the hunt for a property project. This makes them a good fit for anyone trying to sell a house that traditionally struggles on the conventional market, such as unusual or dilapidated properties.
Selling your house at auction isn’t cheap. If your property is sold, the auction house will charge around 2.5% of the sale price. Even if you’re not able to off load your home, you’ll still be liable to pay the auctioneer fees.
You will also need to pay a solicitor to prepare a legal pack, which is reviewed by potential buyers prior to making an offer. The pack includes a wide range of information about a property, such as the title plan and lease details.
The reserve price is decided between you and the auctioneer, and is the minimum sum that you will accept for your property at auction. It’s very important to choose a reserve price that you’re happy with, because once it’s met there is no turning back.
The guide price, on the other hand, gives buyers an idea of the value of a property. The price should be realistic but low enough to entice bidders. The auctioneer will help you to set this.
Although your auction house will do what they can to market your property, you shouldn’t rely solely on them to publicise the sale. Let friends, family and colleagues know about the auction and ask them to spread the word.
You should also put plenty of effort into preparing your home for viewings. It should be clean and tidy both inside and out. This will help to ensure that any potential buyers will see your property in its best light.
On the day of the auction, you’re under no obligation to attend. If you choose to stay away, your auction house will alert you of the outcome.
In the event that your house doesn’t sell, don’t be too disheartened. You may still be able to negotiate with a buyer after the auction, although you’ll need to be willing to lower your terms.
On the other hand, if your house sold – congratulations! You can look forward to receiving full payment within a month.
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