If you’ve been hoping to get a great winning bid and enter into a sale contract quickly by selling through a property auctioneer, you’ll naturally feel let down if your house fails to sell. The auctioneer may reject a potential winning bid, too.
While this can be discouraging, there are other options available. In this article, the experts at Property Saviour explain what to do if a property doesn’t sell at auction.
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Why Your House Didn’t Sell at Auction?
There are a few common explanations for why a property may not sell at auction. Let’s examine some of them below.
The Reserve or Guide Price Was Too High
As a seller, you must agree with the auctioneer on a reserve price. This is confidential and the lowest bid you’ll accept.
Auction house staff are usually experienced in such matters, but mistakes can still be made. If your reserve price is too high, bids may be declined.
It is possible that you may not receive the offer you want. The guide price is set by the auction house and can be lower or higher than the reserve price. This is made known to potential buyers. A guide price that is too high may put off buyers.
Conversely, a low guide price can be problematic too. It may indicate issues with the property which are not immediately visible.
The auctioneer will not be paid if the property does not sell, so it is in their best interests to find a viable solution.
There Has Not Been Enough Buyer Interest
An auctioneer may monitor the amount of interest in the lot, such as viewing requests, general enquiries, and applications for the legal pack, and predict that the bidding won’t reach an appropriate level during the event.
If this is the case, they may choose to withdraw the lot and leave it unsold.
Bids Have Been Too Few or Too Low
Even before the auction, interest levels might have been good, but there’s still the possibility that too few people will bid when the time comes, or that all bids will be insufficient. This could mean that your lot will be withdrawn or won’t sell at all.
If potential buyers haven’t had the chance to view the property you’re selling, it’s unlikely that they’ll bid.
Being able to see the building “in the flesh” is an important part of the process, and if there isn’t enough opportunity for this, bidders won’t want to take the risk.
Your Legal Pack is Flawed
It could be that something is missing from your property’s legal pack, or that the details are wrong or worrying in some way. If the buyer’s lawyer has warned them about a problem with the pack, they may avoid your property altogether.
What Happens if a Property Doesn’t Sell at Auction?
UK auction houses reserve the right to withdraw lots if they do not command suitable interest, if bidding does not reach the reserve price or if the seller fails any legal checks. Should this happen, or should the property simply fail to sell, there are certain things you can do.
Relist for Auction With Improvements
You may choose to re-list your property at a future auction event, addressing the issues that led to the original failure. For instance, you can work on being more accommodating with viewings or prepare a more comprehensive legal pack.
How Much Does it Cost to Sell a House at Auction?
You need to pay fees to a solicitor, auction administration fees between 2 and 5% of the sale price of the property, and any marketing charges if you are auctioning your property.
To get the best out of the auction, it’s important to present your property and auction pack in the best way possible. Otherwise, if the auction is unsuccessful, you will have to pay these fees again to relist the property.
Accept a Private Offer
Some buyers may attempt to get a better deal on auction property by reaching out to the seller of a withdrawn lot after the event and offering a lower price.
You may be asking yourself, “If I’m unsuccessful in selling my house at auction, can I accept this offer from a different party?”
The answer is yes – if you would like to pass the property off to someone else, this is a viable option. Of course, if you still want the sale to meet your desired reserve price, you can decline.
Choose a Different Method of Sale
Auction might not be the best choice for your property.
Consider other options, such as an estate agency or a different auction house, if you’re looking to sell. If you’re in a hurry, consider Property Saviour, a fast homebuying service.
We can offer up to 75% — or even more — of your home’s market value. Plus, there are no solicitor fees or estate agency charges.
And we can close in as little as seven days. For more information, or to request a cash offer, contact our team today.
Your solicitor or conveyancer will inform you if there is anything you need to do before signing and sending back the mortgage offer to us. In many cases, you can sign your documents electronically – if so, we’ll include the instructions on how to do that in your offer.
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