Property Saviour logo
Call Me Back, Please

How Much Does it Cost to Sell a House at Auction?

Property Saviour » Modern Method of Auction » How Much Does it Cost to Sell a House at Auction?

Cost considerations are essential when selling a home. How much does it cost to sell a house at auction?

Contrary to popular belief, auctions can be cost-effective. With just a few extra bids, sellers can find buyers who are active and interested, particularly when the item is well-suited to the auction format. Continue reading to find out more.

Table of Contents

Fees and Costs for House Auctions Explained

Before we confirm the instructions, we discuss fees with the seller. These cover our catalogue expenses and a commission on the sale. The cost depends on the type of property or land being offered at auction since our catalogue contains a wide variety of lots.

The agreed house auction fees are taken from the buyer’s deposit, and the remainder is sent to the seller’s legal representative before completion.

We explain all the potential costs, how auction commissions work, and why auctions may be a great way to get the most out of your property sale. In many cases, the overall expense of a property auction is comparable to what you would pay a conventional estate agent, but you get the advantage of a quicker sale and the chance to sell to the highest bidder.

As a property auction specialist, we suggest looking at three cost factors: entry fees and marketing fees, legal pack creation, and auction commissions.

  • Entry and marketing fees are for the auctioneer and cover advertising your property and creating the necessary materials required to attract multiple buyers.
  • Legal packs are compiled by a conveyancing solicitor and contain all the information and documents that prospective bidders must see to decide if the property up for auction is suitable for them. This typically costs £250 or more.
  • Lastly, the auction commission is taken from the buyer’s deposit. The benefit for a seller is that no commission is due if the property does not sell, only when it is sold at or above the minimum reserve value.

Are the benefits worth the cost of selling a house at auction? 

The selling of your property very much depends on your situation and how much control you want. Using an auction can be a great way to sell quickly which can be beneficial if you need to access funds quickly.

As the seller, you will have control over the whole process, from the surveys and valuations to the photography and legal paperwork. You can also decide the reserve price and any costs which arise can be passed on to the buyer.

This means you have full control over the terms and conditions of the sale agreement, and any flexibility offered to the buyer will not result in extra expenses for you.

How Much Does it Cost to Sell a House at Auction
Using an auction can be a great way to sell quickly which can be beneficial if you need to access funds quickly.

Auctioneer Sales Commissions Explained

Commissions vary depending on the type and value of the property. Special properties which are likely to be sold for a price higher than the guide price can often garner higher commissions.

Unusual properties, those in high demand, or those with unique features can all potentially result in higher commissions.

Costs of Preparing a Legal Pack for a Property Auction

Legal packs are essential for listing any property at auction. They provide details about the property’s legal status and ownership, such as:

  1. Property details,
  2. Tenancy documentation,
  3. Land registry information,
  4. Ownership deeds,
  5. property searches.

A comprehensive legal pack increases your chances of getting a good price at auction since it shows that the lot is secure and well-documented, which potential bidders are more likely to trust.

The auction house does not prepare the legal pack; this requires the help of a solicitor or other legal representative. The cost of the pack depends on how complicated the lot is, and whether there are any special details buyers must be aware of, like a sitting tenant.

Typically, legal packs cost around £200-£400, but they are usually more expensive for leasehold lots since the solicitor must contact the freeholder for additional documents.

Remember that property searches and legal work are part of any property sale, regardless of whether it is through an auction or not. So this cost does not only apply to listing a property in an auction.

Property Survey Costs

Sellers are not required to include a full survey in their legal documents, as this is typically carried out by the buyer to decide if the listing price is a fair value or to detect any structural issues that might affect their bid at the auction.

However, if a buyer requests it, they can arrange and pay for a survey to be conducted while the property is open for viewings ahead of the auction.

A buyer can’t bid with a caveat or make an offer contingent on a survey at an auction, so they must organise this before the auction day.

What are the Costs if the lot doesn’t sell at the Property Auction 
Sales commissions are based on the sale price of the property. If your lot does not sell, you won't be required to pay.

Costs if the lot doesn’t sell at the Property Auction 

A small portion of properties don’t sell on the day. While this can be disheartening, it’s to be expected.

Don’t lose hope! Unsold lots are usually listed online and available for 28 days after the auction. Everyone who looked at the property will be contacted, and the auctioneer will provide feedback.

Sales commissions are based on the sale price of the property. If your lot does not sell, you won’t be required to pay. The auctioneer only charges the commission once the property has been sold.

However, costs like hiring a solicitor to prepare a legal pack, entry fees, and other fees associated with your listing are incurred before the auction date and must be paid upfront.

Comparing the Costs of Selling a House at Auction vs Through Private Treaty

The ideal method of selling your home is dependent on your needs, situation and anticipations. Auctioning is usually faster and more dependable than a traditional property sale – and is often much less trying!

Achieving a Reasonable Property Sale Price at Auction

Auction properties can vary widely in value. Some houses may sell for much more than if they were marketed traditionally, while others may reach a lower price. It depends on the individual property.

Competition at auctions can be intense. Property auctions attract professionals like developers, investors and portfolio landlords, as well as DIY enthusiasts and people searching for their next home.

Many auction properties are non-standard or require refurbishment, which makes them easier to sell as bidders at auctions are usually experienced in renovation work and are not put off by the condition of the property.

When the property is desirable, due to its location or the potential for adding value after restoration works, bidders often compete and drive the price up, leading to an attractive value.

Property Auction bidding process
Property 'flippers' sometimes buy homes from estate agents at a very low cost due to the state of the house.

Transparency in the Property Auction Bidding Process

Auctioning a house is a transparent process: when the auction is taking place, all bids can be seen by potential buyers. This makes the process open and clear.

Property ‘flippers’ sometimes buy homes from estate agents at a very low cost due to the state of the house. They can then sell it at auction, making a profit quickly. This is why, in some cases, the cost of selling at auction can be a good value for money.

Are there other alternative ways to sell my house?

In addition to traditional or online auctions, other ways to sell a property include sealed bids, cash buyers, part exchange, and raffles.

  • Sealed bids are a type of auction used if there are lots of competing buyers. The seller receives offers from each prospective buyer before selecting the winning bid, which remains undisclosed.
  • Property raffles are rare in the UK, where people buy a ticket to win a house. It is legal to raffle a home, but it is important to hire a solicitor to ensure everything is above board. To raise the asking price of the property (e.g. £300,000), 60,000 £5 raffle tickets would need to be sold, which is a large undertaking.
  • Part exchange homes are where the current home serves as part payment for a newly built property, and the sale is guaranteed.
  • A cash buyer is someone who can purchase the property outright, without a loan or mortgage. This type of sale releases funds quickly to the seller.

connect with us!

We’d love to hear from you if you’re thinking of selling your property at Property Saviour. We can help guide you through the process. Just fill out our contact form and we’ll get back to you.

auction hammer

Property Saviour Price Promise

  • The price we’ll offer is the price that you will receive with no hidden deductions.
  • Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
  • These valuations or surveys result in delays and price reductions later on.
  • We are cash buyers.  There are no surveys.
  • We always provide proof of funds with every formal offer issued.

We'll Pay £1,500 Towards Your Legal Fees

  • No long exclusivity agreement to sign because we are the buyers.
  • You are welcome to use your own solicitor. 
  • If you don’t have one, we can ask our solicitors for recommendations.
  • We share our solicitor’s details and issue a Memorandum of Sale. 

Sell With Certainty & Speed

  • Our approach is transparent and ethical, which is why sellers trust us.
  • 100% Discretion guaranteed. 
  • If you have another buyer, you can put us in a contracts race to see who completes first.
  • Complete in 10 days or at a timescale that works for you.  You are in control.

Sell with certainty & speed

Share This Article:

Related Articles

Skip to content