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Selling a house can be a lengthy and laborious job. For some, the long and tedious process is just too inconvenient and often, they will feel the need to lower their asking price just for a quicker sale and to move home sooner. If a quick and straightforward sale is what you’re after then auctioning your property may be a viable option. Auctions are usually best suited to properties that are unusual, unconventional or even run down. Auctions are a great way to entice property and buying experts that are able to recognise a property worthy of their next project.
It is a common misconception that your property will likely achieve a lower price through an auction. The reality is, that it all depends on who is in the room on the day and that will be down to the auction house and how well they have advertised your property. The key is in ensuring that the right people are at the auction. The experts with knowledge of buildings and home improvement and savvy business people looking to turn a decent profit. High demand for your property can easily drive up the price from those who properly understand the value of your home.
One of the most attractive perks of selling at auction is how quickly you can get your sale. If time is of the essence and you don’t want to run the risk of a buyer cancelling or pulling out of the sale then an auction is undoubtedly the way to go. As soon as that hammer comes down, that’s it. The buyer has committed to the sale. The buyer will be required to pay 10% of the final price as soon as the gavel drops before paying the final 90% within 30 days of the auction.
Auctioneer costs will vary from company to company, but in general, you will pay around 2.5% of your final property price to your auctioneer. There may also be some advertising costs so be sure to ask your auctioneer about these before agreeing to proceed. Like traditional property selling, you will also need to hire a solicitor to oversee the legal side of the auction, both beforehand and during the day of the auction. Conveyancing solicitor prices vary vastly, so be sure to shop around and compare conveyancing costs.
A quick search on Google with your location included will reveal all the auction houses in your area. As part of your search and your decision-making process, ask yourself if you trust each company to show your property off to its fullest potential. Check out previous properties they have advertised and auctioned. It’s fair to assume that well known and established auction houses will generally be more expensive than the lesser known houses, but will more likely draw in larger buying crowds and know how best to market your property. Likewise, lesser known companies may be more cost-effective and more open to your needs and demands; Have a look at what is on offer in your area and use your better judgement. Consider whether you want more experience or affordability, it’s a simple game of pros and cons.
Your auctioneer will usually be able to help you with this aspect of the property selling process. Guide prices can be seen by potential buyers, but may not necessarily be the price that your property sells for – it could be higher or lower, or may not even sell at all depending on your reserve price. Setting a somewhat low guide price may be a good way of luring in several buyers interested in your property but be sure to glean plenty of advice and guidance on this.
Your property reserve is the lowest price you will be willing to accept and is only known by you and the auctioneer. The reserve price acts as a safeguard to ensure your property is not sold too far below its market price. You should make sure you are happy with your reserve, more so than the guide price which is more for marketing purposes. There is no going back or cold feet in the auction process – your property is sold as soon as the gavel falls. If all offers are below your reserve price then the auctioneer will pull your house from auction.
Again, your auctioneer should be able to help with setting the right price but don’t trust them with everything. After all, they still get paid even if your property sells well below the actual market value. If you are unsure, think about the amount you paid for your property and the amount that you think it is worth now. You may even want to consider getting a quotation from a local estate agent to see what your property could go for on the traditional market.
Ultimately, the success of your property at auction depends wholly on who is in the room on the day. You only need two interested parties to drive the price up – but without them, you could lose out. It is your responsibility to ensure the property is presentable and you must be accommodating for any open days or viewings from prospective buyers ahead of the auction day. You should also ensure that news of your property sale is heard by as many prospective buyers as possible. Use social media to help sell your property and get the word out among friends and colleagues.
Don’t be pressured by anyone, least, not your auctioneer to sell your property at auction. Get as much advice from different sources and be certain of your decision because selling at auction is quick and it is final. You will not have the option to pull out once the auctioneer announces the house ‘SOLD’!