In the rapidly changing property market, the methods for buying and selling homes have evolved significantly. One approach that has garnered a lot of attention is selling a house through auction. But is auctioning now the most common way to sell a house?
Let’s explore this topic, examine the various aspects of auction sales, and consider the pros and cons, including the increasingly popular Modern Method of Auction.
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Is Auction the Most Common Method of Selling a House Now?
Property auctions involve selling homes to the highest bidder in a competitive setting. Traditionally, these auctions were held in physical auction houses, but with technological advancements, online auctions have become commonplace. Auctions offer a fast-paced, transparent process that can be appealing to both sellers and buyers.
The Rise of the Modern Method of Auction
A significant development in recent years is the Modern Method of Auction. Unlike traditional auctions, this method allows for a longer bidding period, often conducted online, providing more time for potential buyers to place their bids. It combines the certainty and speed of a traditional auction with the broader appeal of a private treaty sale, where buyers may need time to arrange their finances.
What can go wrong with a modern method of auction for a seller?
When selling a property through the Modern Method of Auction, several potential issues can arise for the seller:
- Higher Fees and Costs: This method may involve higher fees compared to traditional auctions, including entry fees, advertising fees, and auctioneer fees. It’s crucial to review these costs carefully.
- Uncertain Sale Price: While sellers can set a reserve price, there is no guarantee of the final sale price until the auction concludes. This uncertainty can be a disadvantage for sellers hoping for a specific price.
- Limited Control Over the Sales Process: Sellers have less control over the sales process as the auction provider handles marketing, viewings, and negotiations. This lack of control might not suit all sellers.
- Pressure to Sell: The fixed timeframe for bidding can pressure sellers to accept offers that may not be ideal. If the property doesn’t sell within this timeframe, it may be perceived as “unsellable,” complicating future sales efforts.
- Potential Delays in Completion: Although the process is designed to be quick, there can still be delays due to buyer financing issues, legal complications, or other unforeseen factors.
- Reservation Fee Issues: The buyer must pay a non-refundable reservation fee, which can deter potential buyers and affect the final sale price, as buyers might factor this cost into their bids.
- Legal and Documentation Challenges: Preparing a comprehensive legal pack is essential, and any inaccuracies or undisclosed issues could lead to complications or liabilities for the seller
Why Are Auctions Becoming Popular?
While auctions are not yet the most common method for selling homes, they are certainly gaining popularity. Several factors contribute to this trend:
- Speed: Auctions can significantly reduce the time a property is on the market. Once the hammer falls, the sale is legally binding, with completion typically occurring within 28 days.
- Transparency: The bidding process is open, ensuring the final sale price is determined by what buyers are willing to pay on the day.
- Competition: Auctions can drive competition among buyers, potentially leading to a higher sale price, especially if multiple bidders are interested in the property.
- Certainty: Unlike private treaty sales, where deals can fall through due to financing issues or buyer indecision, auctions provide certainty once the highest bid is accepted.
The Downsides of Selling via Auction
Auctions have their drawbacks. Before deciding if an auction is right for you, consider the following:
- Uncertainty: While competition can drive prices up, there’s also the risk that your property might not attract as much interest as expected, leading to a lower sale price.
- Costs: Sellers often need to pay auction fees, which can be higher than those in a traditional sale. These fees can include marketing costs, auctioneer fees, and other associated charges.
- Limited Pool of Buyers: Some buyers may be deterred by the quick turnaround time and the need for immediate finance, potentially narrowing the pool of interested buyers.
- Binding Contracts: Once the auction concludes, the sale is legally binding. This can be stressful for sellers if the final bid is lower than anticipated or if personal circumstances change.
Is Auction Right for You?
If you’re considering selling your home, you might wonder, “Is auction the right method for me?” The answer depends on your specific circumstances. Auctions can be a good option if:
- You need to sell quickly.
- Your property is unique and likely to attract competitive bidding.
- You prefer a transparent process.
On the other hand, if you’re not in a rush, prefer to negotiate on price, or are concerned about the costs and risks, a private treaty sale might be more suitable.
Should you auction your house?
Do you need a quick sale due to probate or to fund investment in another property? Is your house in need of major refurbishment, modernisation or repair? Is it in demand commercially?
We receive many enquiries from sellers who have been unsuccessful at auctions. We are cash buyers and can purchase any property, giving you certainty and speed of sale. There are no upfront fees; we’ll even pay £1,500 towards your conveyancing costs.
If selling a property keeps you up at night, sell to us and relax.
Sell Safely to Property Saviour
Here’s why Property Saviour is a great alternative to property auctions:
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.
