Looking for selling property at auction advice?
Published by Property Saviour
The UK's No.1 Fast House Sale Company
September 16, 2018 - Read time: 3 minutes
But you don’t know where to begin?
We hear you. Because sometimes, the selling property at auction advice you will find online, does not properly highlight the risks involved in the process.
In this section, we go through all the selling property at auction advice that you need to know! This includes some candid truths about selling property at auction advice that your auctioneer won’t share with you.
Here are some of the questions we often get asked:
Can I auction my own house?
Certainly, you can auction your own house. When it comes to auctioning a house, there are few pros and many cons. Let us cover the pros of selling property at auction:
- Once the hammer falls and the auctioneer says sold, your property has exchanged contracts.
- The buyer will be obliged to put down a 10% deposit typically. The buyer can still not complete but many do go on to complete the purchase. This does not include so-called “modern auctions” where the buyer will pay £5,000 plus VAT to auctioneer and their introducing estate agent (a con in itself).
Now let’s look at cons of selling your property at auction:
- You may have to wait for up to 2-3 months for the next auction. Then after the auction you have to wait another 4 weeks (28 days) for the completion to take place that’s IF your property actually sells. This is not ideal if you are looking for a quick sale. This is where Property Saviour can help, as we buy properties quickly for cash in days rather than months. Condition or location of a property is not important to us.
- First rule of auction is that your property is priced as low as possible to get maximum interest. You can’t set a reserve above 10% of your asking price or your guide price. If an auctioneer has persuaded you to advertise your property for a very low price then you will be obliged to sell it at your reserve price. This means that you could be giving away your property. There is another fairer and more ethical way to sell your property, read on to find out more.
- Upfront costs: You will have to pay the auctioneer an upfront entry fee to sell your property typically this ranges from £500 to £1,000. You will also have to pay your solicitor to prepare a legal pack and searches. This can cost in region of £1,500 to £2,000 upfront with no guarantee of success. Yes you may be able to recuperate cost of searches from your buyer if you are successful but that’s just about it. Property Saviour will pay your legal fees if you decide to sell your property to us.
- One downside is that you will have to pay a solicitor to accompany you to the auction itself. This is an additional expense to factor in, should you go down this route.
- Auctioneer gets paid first before you do: The auctioneer will deduct their commission typically 2.5% plus VAT from the deposit. This means that they get paid first before you do and we feel that it is wrong. The auctioneer should only deduct their fee once the sale has completed and NOT before.
- Lock in period: An Auctioneer will have a clause in their contract that locks you into their contract for another month or two if your property does not sell in the room! We feel that it is unethical as your circumstances may need a quicker sale and their failure to perform should not mean that your suffering prolonged.
- Modern Auction: If your property has been sitting on market for months then your estate agent may refer you to so called Modern Auction. In a Modern Auction, the buyer does not exchange contracts. Instead they pay £6,000 plus VAT to your auctioneer if your property sells. The buyer then has 28 days to exchange contracts and a further 28 days to complete. Notwithstanding the fact that you will be told “there is no fees to pay” you could be wait 2-3 months for your next modern auction and a further 2 months for it complete. Can you guess who takes the £6,000 for “agreeing the sale” of your property when it has cost you money in preparing the legal pack?
How much do Auctioneers charge to sell a house?
An auctioneer will take around 2.5% of the selling price of your house. The exact amount may vary. A more well-established auction house will ask for more.
Which auctioneer to go with, is one of the many choices you must make on your own, if you decide to go with an auction house. You may also be charged fees by the auctioneer, regardless of whether the house sells. There can be additional advertising fees on top of these fees and charges.
Ultimately, selling via an auctioneer is not a cheap option.
Give me more selling property at auction advice
One of the disadvantages of auction is that you may not be prepared for the world and its wife to come barging into your house. If you were under the impression that an auction meant less invasion of privacy, with fewer home viewers, then it does not. You will find that people want to view your home, without any commitment to buy.
However, when you sell via Property Saviour you will not have this intrusion. It only takes one viewing of your property to secure a sale with us.
One important piece of selling property at auction advice you may not get, is that it is not always the best way to sell a rundown property. Sellers often think an auction is their only option for a difficult to sell property. Houses that may prove difficult to sell include those that are fire damaged, homes with subsidence, Japanese Knotweed and structural issues.
These are all types of property which Property Saviour buy from sellers. When these houses are put up for auction, there is no guarantee they will sell, whatever their condition.
However, you do have this guarantee when you sell to us.
What are the disadvantages of auctioning your house?
Unfortunately, there are a lot of risks and downsides that come with selling at house auctions. This can be off putting for many sellers:
- Your Property Is Not Guaranteed To Sell
This is the number one problem with property auctions. There are absolutely no guarantees that your home will sell at all.
However, when you sell to Property Saviour, you are guaranteed to sell your house.
- You have to pay to advertise again
If your property has failed to sell the first time around with an auction house, you can, of course try again. Many people do succeed in selling their home eventually, with an auctioneer. However, you will have to pay to re-advertise the property with the auction house. This sort of detail is not always publicised on the website’s selling property at auction advice!
- You can pay fees even if you sell your house privately
Something that is virtually never mentioned about selling your property at an auction, is advice telling you what happens should you go on to sell it privately, before the auction date. If you have listed your property for sale with an auction house, you will be charged a fee. If you go on to sell your home via another method, you will still be liable for this fee.
- It limits your potential buyers
When you auction your home, you are cutting off a lot of potential buyers who may have seen it otherwise. In order to participate in house auctions, bidders must be registered in advance with the auction house. Not everyone will want to do this, and it limits the field of potential buyers considerably. Also, the people who go to property auctions are often professional landlords. This means they are looking for a bargain and not their ‘dream home’ for which they may be prepared to pay out more for.
- It’s not as fast as you want it to be
If you were hoping for a quick sale, you will be disappointed as there are absolutely no guarantees of this. This isn’t something auctioneers want you to know about in their selling property at auction help and advice sections! However, when you sell with Property Saviour, you will sell your home extremely quickly.
- It will be expensive
With all the additional fees, selling a home at auction can turn out to be more expensive than selling a home in the ‘traditional’ manner. It is also more expensive than selling your home directly to Property Saviour.
- You could be disappointed
Ultimately, you can just be disappointed with the whole experience and not receive what you had hoped for your property. There are no such risks when selling your property directly to us, as we will be upfront with you from the start about everything.
Why choose Property Saviour?
Unlike an auction house, there are no fees and no legal costs when you sell to us. We have none of the disadvantages of auctioning your home with many of the advantages.
We don’t charge a valuation fee and we will cover your legal expenses.
There are no hidden costs or sneaky extras. We will cover your legal fees too. We will complete in days usually 10-15 days from start to finish which means that you do not have to wait for months. The sale is certain as we can quickly exchange contracts and give you deposit upfront if you need this.
Selling your home to us can be done in days, not months and puts you firmly in the driving seat.
Call us today to discuss how we can help you on 0113 320 6700.