Considering selling your house via auction? While traditional property auctions are well established, there’s another option gaining traction: online property auctions. These auctions offer a fast-paced alternative, potentially finding a buyer in weeks and guaranteeing a sale once the gavel falls.
However, is a speedy auction the right fit for you? This guide will explore the pros and cons of online auctions, helping you decide if this method aligns with your needs and timeline.
If you’ve found yourself in the situation where your house isn’t selling, then you may have considered finding a quicker route to sell. Selling your house at auction can be a fast and efficient way to get it off your hands, but it’s not for everyone.
Here’s a breakdown of the pros and cons of selling property at auction to help you decide if it’s the right approach for you.
Auctions offer a quicker timeline compared to traditional listings. Once the gavel falls, the sale is legally binding, minimising the risk of the buyer backing out.
Auction buyers usually have their finances in order, eliminating delays caused by complex property chains that can plague traditional sales.
The competitive atmosphere of an auction can spark bidding wars, potentially driving the final selling price above the market value.
You set a reserve price, acting as a safety net. The auction only finalises if bids reach that minimum threshold.
The sale usually completes within 28 days, allowing you to access your funds quickly.
While you have a reserve, the final selling price can be unpredictable, making it difficult to plan for your next move financially.
There’s a chance your property might not sell if there’s low buyer turnout or if it goes up early in the auction order.
If you’re living in the property, the rapid sale timeframe necessitates a fast relocation plan.
Once the gavel falls, the sale is final. There’s no turning back, so ensure you’re absolutely certain about selling before proceeding.
The sale usually completes within 28 days, allowing you to access your funds quickly.
Selling your house at auction can be a good idea for sellers who:
Ultimately, the decision will depend on your individual circumstances. Consider your timeline, property type, risk tolerance and comfort level with an uncertain final price.
Auction house selling fees are broken down into several key costs you’ll encounter when selling a property through auction. Here’s a breakdown of the industry standard expenses:
This is the primary fee charged by the auction house, usually around 2% +VAT of the final selling price. It’s only payable if your property sells successfully, think of it as a performance-based fee (for a £200,000 sale, the commission would be £4,000+VAT).
Negotiation is possible, particularly for valuable or highly desirable properties. There’s also a minimum commission fee set by the auctioneer, usually starting at £1,500 and varying depending on the property value.
Auctioneer’s often have a minimum selling fee, such as £1,500. This works both ways, benefiting sellers of lower-value properties by ensuring a baseline level of service regardless of the final sale price. As well as auctioneers by guaranteeing the auctioneer a certain amount of compensation for their services.
For instance if your property sells for £10,000 you would pay the £1,500 minimum fee instead of the standard commission rate of £200 +VAT on the sale (2%).
Most auction houses charge an upfront fee to cover listing your property in their auction catalogue. This can be around £300+VAT or more. Some may allow you to defer payment until after the sale, but it’s an initial cost to factor in.
The entry fee for selling auction helps cover marketing costs, by offsetting the expenses of listing your property in their auction catalogue and marketing materials which ensures your property gets exposure to potential buyers.
Since there’s an upfront cost involved, it discourages casual sellers and attracts those who are genuinely committed to selling their property through auction. This can lead to a pool of more serious buyers interested in your property.
Your solicitor prepares this document outlining all legal details about your property. It starts at £200 for freehold properties, but can be more for leaseholds due to additional paperwork like management information packs.
A well-prepared legal pack is important for a successful sale. Don’t skimp on this as it can impact buyer confidence and potentially the final selling price.
Withdrawing your property from auction might incur fees, which could reach the full auctioneer commission rate, but this will depend on the auction house you decide to use.
When you sign up to sell your house at auction, the auctioneer allocates resources to market your property, prepare legal documents and potentially conduct viewings. If you withdraw, they lose out on this invested time and effort. The withdrawal fee compensates them for these upfront costs.
But, the withdrawal fee can be as high as the full commission rate you would have paid if the property has sold successfully. This can be a substantial sum, so it’s important to be certain about selling before committing to an auction.
Avoiding the withdrawal fee entirely can be difficult as most of the contracts are legally bind you to the process, but there are some ways to minimise the risk:
Auctions are a fast paced environment with a final sale meaning a final sell. Ensure you are ready to move on before committing to the auction process.
Understand the property market and set a realistic reserve price. Don’t list your property at auction unless you’re comfortable with the possibility of it selling for that amount.
Carefully read the auction house’s terms and conditions, specifically the withdrawal fee clause. Look for details like:
If you can find a suitable buyer willing to purchase the property outside of auction before the withdrawal deadline, you might be able to convince the auction house to waive the fee (discuss the possibility beforehand).
Depending on the auction house and how far in advance you notify them, there might be some room to negotiate a reduced withdrawal fee, though this isn’t guaranteed.
Open communication with the auctioneer is key. If you have any concerns or doubts after signing, explain the situation honestly and see if they’re willing to work with you. However, be prepared for the possibility that you might still incur some kind of fee.
If your property doesn’t sell during the auction, you may be allowed to re-enter the next auction for free, but if it continues not to sell then you might still pay for the legal pack and entry fee, but not the commission.
Auction fees are usually structured as a performance based cost, meaning the auction house only gets paid if they successfully sell your property.
Selling house at auction can be a fast and efficient process, but there are two main methods to consider: traditional and modern. Understanding the differences between them will help you decide which approach best suits your needs.
In a nutshell, traditional auctions are ideal for sellers who prioritise a quick, secure sale with a cash buyer. While modern auctions offer more flexibility and a wider reach, potentially attracting buyers who need financing and the sale may result in a higher sale price.
Traditional auctions usually take place in person at auction houses, though online options are merging. The bidding happens quickly, with a final decision often reached within minutes.
If your property sells at a traditional auction, contracts are exchanged immediately. The winning bidder usually puts down a 10% deposit right away.
The entire sale, from auction to completion, is expected to be finalised within 28 days, ensuring a fast transaction.
Traditional auctions often attract cash buyers due to the fast pace and immediate deposit requirement. This can be ideal for sellers who prioritise a fast, cash sale.
If a buyer backs out after the exchange, they forfeit their 10% deposit, offering financial security to the seller. This discourages buyer drop-outs and promotes a more secure sale.
Modern auctions are a newer approach offering more flexibility and a longer timeline for both buyers and sellers. They primarily operate online, similar to eBay, where properties are listed and bids are placed within a set timeframe.
Unlike traditional methods, the winning bidder in a modern auction pays a non-refundable reservation fee on top of the purchase price. This secures the property for the buyer.
The modern method allows for a total of 56 days to complete the sale. The first 28 days are for exchanging contracts and securing the deposit, followed by another 28 days for finalising the transaction. This extended time frame provides more breathing room for both parties.
Because modern auctions are online and have a larger completion timeframe, they can attract a wider pool of potential buyers, including those who might require mortgage financing. This method aims to maximise reach and flexibility, potentially leading to a higher sale price.
The modern online auction method offers a flexible and potentially faster way to sell your house online. Here’s a step-by-step guide:
Start by selecting an estate agent or auction house specialising in online property auctions. Their experience in marketing properties for auction is key to attracting a wide range of online buyers.
They can help you set a reserve price (the minimum acceptable selling price) and ensure your property reaches their network of interested buyers.
Early in the process, hire a conveyancer or solicitor to handle the legal aspects of the sale. They’ll compile a legal pack containing all necessary documentation about your property, address any outstanding legal issues and prepare the sales contract for the buyer.
Make your house visually appealing to online buyers. Consider professional home staging or DIY improvements to enhance its attractiveness in photos and virtual tours (if offered).
Work with your agent to establish your guide price, which is used to publicly advertise the house price and estimated market value, as well as the reserve price which is the minimum amount you’re willing to accept for the house.
Allow about a month for marketing before the auction starts. Your agent will list your property in online auction catalogues, property portals and their social media channels.
They may also facilitate virtual tours and arrange physical viewings (if possible) for interested buyers who want to see the property in person.
In a modern online auction, bidding can extend over several days or even a month. Stay in touch with your agent for updates on bids, offers and several buyer interests.
The modern method allows 28 days after the auction for the buyer to exchange contracts. This provides them time to secure financing or finalise their decision. If they withdraw during this period, they forfeit their reservation fee and may face additional charges.
The sale is completed (ownership transferred to the buyer) within 28 days following the contract exchange.
Selling a house at auction offers a faster timeline compared to traditional open market selling methods. The total selling house at auction process can take anywhere from 6 to 10 weeks, compared to 6 to 10 months. This includes everything from instructing the auctioneer to completing the sale.
The speed of your sale can be influenced by factors like buyer interest and setting a realistic reserve price (usually around 75%-80% of market value). A competitive atmosphere with an attractive reserve price can lead to a quicker sale.
If you need to sell very quickly, the unconditional auction format can be the fastest route. In ideal circumstances, this option can take as little as 4 weeks from instructing the auctioneer to completing the sale.
Considering a property auction? This approach offers a unique and potentially fast route to selling your property. Unlike traditional selling methods, auctions create a competitive atmosphere that can drive up the final sale price.
But with various auction houses and platforms available, choosing the right one can be daunting. Fear not! We’ve curated a list of some of the UK’s best online auction companies. We’ll delve into their unique selling propositions to help you determine if they align with your specific needs and goals.
Sell fast, sell smart with The Property Auction Company, our brand new sister company. They offer an innovative approach to selling your property, with the potential to secure an auction sale within the same week you inquire.
Just like us, The Property Auction Company prioritises transparency. Their experienced team will assess your property and provide honest guidance on whether an auction is the best fit. If not, they’ll explore alternative solutions, including a fast sale through our online estate agency in as little as 28 days.
What sets The Property Auction Company apart? They offer a comprehensive range of service designed to simplify the selling house at auction process:
If you want to explore selling with The Property Auction Company, enquire today on our website or contact one of our team, and we will get your house on our auction platform!
Established in 2006, Auction House has become a leading name in property auctions across the UK. With over 40 auction rooms in England, Wales and Scotland, they offer a massive network for both buyers and sellers.
Auction House boasts a strong national presence, holding over 200 auctions and selling over 3,000 properties annually. Their focus on local representation ensures a deep understanding of regional markets. Each auctioneer is an expert in their area, providing property valuations with a keen eye on local trends and buyer preferences.
Their emphasis on local expertise is believed to contribute to a higher success rate by matching properties with the right buyers in their communities. While Auction Houses’ core business model aligns with traditional, in-person auctions, they have also begun incorporating online auctions to cater to a wider audience.
Auction House isn’t just about reach; they’re demonstrably successful. They hold the title of the UK’s number one residential auctioneer, with consistent growth in sales figures year over year.
Their teams have also consistently received industry recognition, winning awards for “Best Auctioneer,” “Residential Auction House of the Year,” and “Best Franchise.”
However, The Property Auction Company can help you sell your property at auction within the same month, or even week you inquire, potentially faster than Auction House’s 6 to 10 week selling timeline.
Furthermore, The Property Auction Company’s collaboration with a Bridge financing company is extremely helpful for potential buyers struggling to secure a mortgage quickly, potentially leading to a smoother sale.
SDL Auctions, part of the nationwide Chartered SUrveyors Eddisons, is a leading force in live streamed property auctions across the UK. They boast a successful track record, selling hundreds of properties every month through their innovative approach.
SDL Auctions caters to a diverse selling house at auction needs by offering two distinct auction methods:
SDL Auctions seamlessly blends traditional auction expertise with modern technology. Their team of auction specialists provides professional guidance to recommend the best selling method for each client’s specific needs.
Whether you prefer the fast-paced excitement of a live event or the flexibility of timed bidding, SDL Auctions offers a solution to fit your preferences.
Clive Emson is a well-established property and land auctioneer in the UK, specialising in selling properties through auction. Their primary focus is the South East of England, particularly Kent.
Unlike The Property Auction Company, which offers both auctions and alternative selling options, Clive Emson is dedicated solely to auctions. This singular focus allows them to concentrate their expertise and resources on delivering successful outcomes from their clients.
If your property is located in the South East, Clive Emson’s strong regional presence could be a significant advantage. Their deep understanding of the local market and established network of buyers in the area could maximise your chances of a successful sale.
However, if you’re open to exploring alternative selling methods beyond auctions, or your property is located outside the South East, then The Property Auction Company’s wider range services might be a better fit.
Established in 2018, Under The Hammer is a leading online platform for property auctions. It’s important to distinguish them from the TV show “Home Under The Hammer”, as some Trustpilot reviews have highlighted!
In just a few years, Under The Hammer has facilitated the sale of over 2,500 properties through their online auctions. They’ve also undergone a rebrand to showcase their commitment to a smooth and efficient user experience.
Additionally, the company has experienced significant growth, leading to the launch of a brand new, user-friendly website.
Under The Hammer prioritises a straightforward, online approach to property auctions. Their user-friendly website caters to both buyers and sellers, making the auction process easy to navigate.
However, if speed of sale is important to you, then The Property Auction Company might be the better fit.
Selling your house at auction can be a good option if you prioritise speed and a guaranteed sale because it’s fast and secure and allows for competitive bidding.
Properties with minor issues that might deter buyers in a traditional open market sale can find success at auction. Cash investors and those looking for renovation projects often flock to auctions, understanding the potential for future value.
The excitement of a live auction can drive up the final selling price, exceeding the initial valuation.
And then once a buyer wins the bidding, they’re legally obligated to complete the purchase. This sets a clear timeline and eliminates the uncertainty of traditional sales that can fall through at the last minute.
However, auctions don’t always mean that your selling price will automatically rise above market value, most of the time they fail to gain the attention they need.
As we have established in this article, online property auctions are a great way to sell a unique house efficiently and there are plenty of options available on the market. They can also be a great way for:
Selling your property quickly can be a priority, and online property auctions offer an attractive solution. They can potentially find a buyer within a few weeks, and with the gael falling a sale becomes guaranteed.
The excitement of the auction can even drive the final price higher than expected. However, there’s always a chance the property might not reach its true market value, and there’s no guarantee of a sale at all.
For wider exposure and more control over the process, consider an online estate agent. They list your property on major property portals like Rightmove and Zoopla, reaching a vast pool of potential buyers.
You have more control over the asking price and negotiations, and the lower fees often associated with online estate agents can lead to a higher net profit for you. While the sale process might take longer, you might achieve a higher final selling price.
Ready to explore your options? Click the button below to inquire about our online estate agent services. Our friendly team will discuss your property details and provide a house valuation. If you accept our valuation, we take care of everything – marketing, listing, negotiating, legal matters, and even cover the selling costs!
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© 2022 The Property Selling Company
The Property Selling Company is part of The Property Buying Company Limited (Registration No. 08023018) is incorporated in England and Wales. Registered office: 4 Deighton Cl, Wetherby LS22 7GZ
