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How To Sell a Property at Auction?

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When you want to sell your property quickly, finding out how to sell a property at auction may seem like an exciting option.

At an auction, it’s possible bidders will drive up the price of your property – meaning you get a quick sale and a great deal.

However, before committing to go ahead, you need to know the pros and cons of auction sales, because all though your heart is bound to be racing on auction day, you don’t want it to be for all the wrong reasons.  Auctioning a house isn’t for everyone though.

If you are interested, here’s how to sell a property at auction and everything you need to know before signing the dotted line.

Table of Contents

Benefits of Selling at Auction

Selling a property at auction can be a quick and efficient way to sell your property. Here are some benefits to consider:

  1. Speed: Auctions can be completed within a few weeks, which is much faster than the traditional estate agent route.
  2. Certainty: Once the hammer falls, the sale is final, and you can be sure of a quick completion.
  3. No Chain: Auctions eliminate the risk of a chain breaking, which can be a major advantage in today’s housing market.

Risks of Selling at Auction

While selling at auction can be beneficial, there are also some risks to consider:

  1. Low Prices: Properties sold at auction often go for lower prices than they would through traditional means.
  2. Fees: Auction fees can be high, and these costs will be deducted from the sale price.
  3. Uncertainty: You can’t guarantee a sale at auction, and if the property doesn’t sell, you’ll be left with the costs of the auction process.
How much does it cost to sell a house at auction
Even if your property sells at auction and the buyer fails to complete the auctioneer gets paid regardless of end result meaning you lose out.

Tips for Selling at Auction

If you do decide to sell your property at auction, here are some tips to keep in mind:

  1. Set a Realistic Reserve Price: Make sure your reserve price is realistic and takes into account the current market value of your property.
  2. Choose the Right Auction House: Research and choose an auction house with a good reputation and a proven track record of selling properties like yours.
  3. Prepare Your Property: Make sure your property is clean, tidy, and well-presented to attract potential buyers.
cons of selling a house at auction
Watch out for the offer of a free auction meaning that buyer will be hit with inflated fee called a Buyers' Premium which can be up to 4.2% plus VAT on top of purchase price.

How to auction a house online?

Like eBay, you can sell your property online, allowing bidders to participate in a virtual auction.

A disadvantage of an online property auction is that it can be even more of a risk for the seller and make them feel apprehensive or uneasy.

How much do auctioneers charge to sell a house?

You’ll need to consider the auction fees when looking at how to sell a property at auction.

It is a lot more expensive than selling through an estate agent or selling privately to a genuine cash house buyer.

Most auctioneers will charge you an entry fee, alongside an auction house commission rate, which is charged after the property has sold and contracts are exchanged.

Entry fee – this charge covers the cost of entering the property into the sales catalogue and the promotion leading up to the auction.

This fee is usually paid when you first agree to sell your property with the auction house, but on occasions and with prior agreement, it may be settled on the exchange of contracts.

Auction house commission rate – what is fair?

One of the disadvantages of auctioning your home is the auction house commission.

The auction house commission is charged for successfully selling the property.

The auction house commission is agreed between the seller and auction team, with rates of commission varying depending on the auction house and the location.  It can be as much as 3% plus VAT.

What percentage do auctioneers charge?

On average, an auctioneer will take around 2.5% of the sale price, however, the type of property you’re trying to sell, and its estimated value may affect the amount of commission you’re charged.

Remember, you will also need to pay a solicitor to help you with the legalities.

So what happens if my property does not sell in an auction?  Don’t panic. We are here to help you even if your property did not sell.  Why not call us on 0113 320 6700?

How To Sell A Property At Auction
Most auctioneers will charge you an entry fee, alongside an auction house commission rate, which is charged after the property has sold and contracts are exchanged.

How To Sell A Property At Auction?

Regional figures vary but around 70% of all properties listed with a low guide price sell in auctions.  This means that 3 out of 10 properties fail to sell in an auction.

We’ve now had 14 interest rate rises in the last two years.  Auctioneers withdraw or postpone lots so that they can increase their ‘higher sold numbers by reducing the lots offered’.

What percentage of properties sell at auction?

Regional figures vary but around 70% of all properties listed with a low guide price sell in auctions.  This means that 3 out of 10 properties fail to sell in an auction.

We’ve now had 14 interest rate rises in the last two years.  Auctioneers withdraw or postpone lots so that they can increase their ‘higher sold numbers by reducing the lots offered’.

Do houses sell for less at auction?

It depends on the guide price, the property’s condition, its appeal to would-be buyers and its location.  If you are selling a house in an auction for £1, it will have lots of people willing to bid on it hoping to grab a bargain. 

However, if the same house is listed for sale at £1,000,000 then it may not have so much appeal.  Generally speaking, properties listed in auction catalogues are between 50-60% below their true value to get buyers excited.

Is it best to sell house by auction or estate agent
If you require certainty and speed of sale, you don’t need to take a risk at auction instead sell it to a cash house buyer.

Is it best to sell house by auction or estate agent?

You’ll achieve a lower price in auction against selling it via an estate agent however, an auctions sale can be concluded within two to three months vs an average of six months via an agent. 

If you require certainty and speed of sale, you don’t need to take a risk at auction instead sell it to a cash house buyer.

Do houses sell well at auction?

If a house is priced extremely competitively for example 40% or more discount against its current value and it needs full renovation then it is likely to do well provided that the auction isn’t held in December, January or August AND your auctioneer is good at marketing this home.

Do you pay stamp duty at auction?

Yes, you do however, you may be able to claim back stamp duty if the property is uninhabitable or has no utilities connected to it.  Check with HMRC Stamp Duty as rules can change. 

In a so-called Modern Method of Auction, the stamp duty is also due on ‘Buyers Premium’ also known as commission for auctioneer and their ‘partner estate agent’.  This could leave a seller out of pocket.

Who pays auction fees
In a so-called Modern Method of Auction, the stamp duty is also due on ‘Buyers Premium’ also known as commission for auctioneer and their ‘partner estate agent’.  This could leave a seller out of pocket.

Who pays auction fees buyer or seller?

Buyers will be expected to pay an administrative fee and sellers are expected to pay auction entry fees, legal fees, search fees and auctioneer’s fees.

Are house auctions risky?

Risks of selling at auction include the buyers not completing the sale or putting forward their deposit if they feel like the auctioneer is overcharging them for ‘Buyers’ Premium.  Equally, a buyer can pull out of an agreed sale and therefore, only their deposit is lost. 

In this scenario, the auctioneer still gets their commission even though the sale is abortive.  You are ‘encouraged’ to sue the buyer, but litigation is extremely expensive at £300/hour and initial assessment costs you in the north of £2,000 plus VAT.

Why do I need a solicitor to sell a house at auction?

You’ll need a solicitor to prepare the legal pack, order searches and liaise with auctioneer for any queries raised up to day of the auction.

Why do I need a solicitor to sell a house at auction
You’ll need a solicitor to prepare the legal pack, order searches and liaise with auctioneer for any queries raised up to day of the auction.

Why do I need a solicitor to sell a house at auction?

You’ll need a solicitor to prepare the legal pack, order searches and liaise with auctioneer for any queries raised up to day of the auction.

What to do if you want to sell your property quickly?

Now, we’ve covered how to sell a property at auction and discussed the pros and cons of auction sales. You’ll see that it can be a big risk; let’s face it, we aren’t all willing to gamble.

If you want to sell your property quickly with minimal hassle, Property Saviour can help.

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 your timescale.

We offer free valuation and will pay £1,500 towards your legal fees. We offer a free Energy Performance Certificate along with free house clearance.

It’s a huge decision to make, but it costs nothing to give us a call and chat with our experts about your options.

Get in touch, here or call us on 0113 320 6700.

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