When it comes to selling at auction, fees can be high and a sale isn’t guaranteed. This is one of the main disadvantages of auction.
The typical auction commission percentage is 2.5% on average, although it can be higher and there are other additional costs that need to be taken into account.
Many people looking to sell at house at auction are aware that there will be fees they need to consider before going ahead. In search for a total figure they will look online for an auction fees calculator, however unfortunately there isn’t one – and that’s because auctioneers don’t want to reveal these extortionate costs before they’ve reeled the seller in.
In this article, we’ll reveal the answers to the questions sellers are searching for, including:
- How much does it cost to sell a house at auction or how much does it cost to auction a house?
- Can I auction my own house?
- Why auction a house and Is it a good idea to auction my house?
- What does guide price mean at auction?
- How much do auctioneers charge to sell a house?
Alongside this, we’ll also explore the disadvantages of auctioning your home, and offer some selling at auction advice.
Let’s begin with selling at auction fees and the auctioneer commission percentage.
As mentioned selling at auction fees vary and the auctioneer commission percentage is around 2.5%, which may seem like a low number, however once you’ve footed the bill for the other costs – the last thing you’ll feel like doing is paying an added commission rate.
You’ll only pay the auctioneer commission percentage if your property is successfully sold, this sounds like a fair deal at first, until you realise if you’re property doesn’t sell – you’ve just wasted a lot of time, effort and money on marketing fees and legal fees.
When exploring the selling at auction fees, the seller needs to know that auctioneers commission rates don’t usually include VAT – which means even more of your money is being poured down the drain.
Another cost to consider when looking at selling at auction fees involves the legal fees for using a solicitor throughout the auction process.
Many sellers don’t take legal fees into account when they commit to selling a house at auction and this often leaves them feeling stung before they’ve even made it to the day of auction.
If, after reading this, you’ve realised that the fees will be far too high for you to pay, you should give us a call. At Property Saviour, if you sell your property with us, we’ll pay £500 towards your legal fees. Call us on 0113 320 6700.
Find out more about us, click here.
Selling at auction fees – how much are legal fees?
Before an auction sale, the solicitor will need to prepare a legal pack, which potential buyers will review prior to making an offer.
The fees for legal packs can differ depending on the solicitor, but they generally cost around £500 to produce.
Selling a property at auction – entry fees
When considering selling a property at auction, you need to be aware that you’ll have to pay an entry fee the day you agree to go ahead. This fee is used to market the property and can cost the seller up to £3000. That means you’ve just paid the auctioneer without any guarantee of a sale. Is that a risk you can justify taking?
Selling at auction fees – Guide prices
When selling a property at auction, many people are left confused about guide prices, reserve prices and selling prices – so here’s the lowdown. Each auction property is offered at a guide price and is also subject to a reserve price – the guide price is the level where the bidding will commence.
The reserve price is the sellers minimum acceptable price at auction and the figure below which the auctioneer cannot sell. The reserve price, which may be up to 10% higher than the guide price, is not disclosed and remains confidential between the seller and the auctioneer.
Sellers must be aware that both the guide price and the reserve price can be subject to change up to and including the day of auction – this is one of the disadvantages of auction – as nothing is set in stone and there are no guarantees.
Another disadvantage of an auction is that the buyer does not have to go through with the sale, even after the hammer falls. There is no guarantee they won’t change their mind and back out after the winning bid.
If they do back out, it is sometimes because of the house auction fees for buyers that the auctioneer doesn’t make clear to them before the auction takes place.
Buying a house at auction fees
It’s not just the selling at auction fees that are high, the house auction fees for buyers are also high. Let’s take a look at the fees involved.
If you buy a property at auction, you’ll have to pay an administration fee to the auction house, which is typically between £200 and £300, but can be higher depending on the auction house. Buyers also have to pay your solicitor or conveyancer which can range from £500 to £1000. Not to mention stamp duty
Buyers will have to pay stamp duty, too, which can be high. Let’s look in more detail.
There are several rate bands for Stamp Duty.The tax is calculated on the part of the property purchase price falling within a variety of different land tax bands. For example, if you buy a house for £275,000, the Stamp Duty Land Tax will be £3,750, which when added to the other fees, might make the buyer think twice about going ahead.
On signing the contract, the buyer will also be responsible for insuring the property, which is another auction fee they probably haven’t considered.
Auctioneers fees, what is fair?
To make matters worse, if the buyer does back out after realizing the amount of money it’s going to cost them to buy the property -sellers may also face penalty property auction fees if they fail to complete after exchange.
As a seller, now you’ve seen how much buyers auction fees are – don’t be surprised if your property is left unsold on the day.
If you want a guaranteed sale at a low cost, take a look below to find out what we could offer you.
How we can help
Answering your question ‘can I sell a house at auction?’ we’ll tell you yes, you can, however when asking ‘should I sell my house at auction?’ we’d say no, most definitely not.
Why not? Because we know we can offer you a better deal at Property Saviour.
As we don’t buy properties on behalf of investors, there are no hefty contracts to sign and we guarantee to buy your home and complete the process within five to 10 days.
Property Saviour can exchange contracts quickly without waiting months for next auction, with no upfront costs or auctioneer’s fees.
Alongside this, we offer free valuation and will pay £500 towards your legal fees. We offer a free Energy Performance Certificate worth at least £50, along with free house clearance.
Scrap the selling at auction fees and enjoy a quick, no cost sale with us.
It’s a huge decision to make, but it costs nothing to give us a call and have a chat with our experts about your options.
Get in touch, here or call us on 0113 320 6700.