Looking to sell your home at auction? Our property experts remove the risks with an assisted sale.
Selling your house at auction might seem like the best way to get a quick sale, especially if the property has troublesome issues like subsidence, dry rot, fire or water damage. However, for the inexperienced seller, it can be a stressful process with an uncertain outcome.
If you have seen BBC’s Home Under The Hammer TV program, you will be familiar with the process for auctions. You may not be aware that in order to get potential buyers excited, the property needs to have a really low guide price. The guide price is where the bidding will start at. The reserve price is the price at which you will be legally obliged to sell. Following a ruling by Advertising Standards Agency, the reserve price can’t be more than 10% of the guide price.
A property auctioneer will ‘lot up’ his properties into catalogue and the first ten lots usually are very popular. He/she will place ‘lemons’ (these are properties that might not sell) next to ‘star lots’ so that bidders who miss out on their preferred property could end up bidding on a ‘lemon’.
If your property is in Yorkshire, and it is placed with a London auctioneer in a traditional ballroom auction, it is highly unlikely that a potential bidder will pay £200 for a return train ticket to bid on a property that they might not be able to buy.
Property auctioneers like to deal with repeat customers. Banks, administrators and Councils who dispose off properties in auctions on a regular basis. Therefore, they have influence on where their properties are placed in a catalogue of 200 lots. Your property will one of these 200, and your custom to auctioneer is a one-off transaction. The result achieved will be more luck than chance. Do you really think he/she will have time or inclination to give your property the best chance when the odds are against you?
This means that unless you know exactly what you are doing, you could be potentially taking a huge risk with an auction sale.
Would you be happier with a guaranteed cash sale?
Navigating the complexity of the auction process, fee structure and trying to get a fair price for your property might feel like a few hurdles too many. Here we discuss the pros and cons of selling a property at auction, along with our insider tips. If you’ve inherited a dilapated house or simply don’t have time or inclination to learn the ropes of the auction house, you may find it less stressful to sell to a professional cash buyer like Property Saviour instead. A guaranteed discreet sale gives you peace of mind and puts you firmly in control of the situation.
Benefits of selling your house at auction
Some people are natural-born adrenaline junkies. If you enjoy the excitement and the fear of uncertainty or the challenge of doing it all on your own, then this may be the route for you. The typical advantages of house auctions are:
Disadvantages of selling your house at auction
If you’ve just suffered the loss of a loved one, perhaps after a long illness or stay in residential care, you’re unlikely to be in the right zone emotionally to cope with the auction process. You may be wanting to start a new relationship and clear bad memories of the past by selling your old house. Or perhaps you find yourself in deep financial distress; bailiffs hounding you, multiple CCJs or threats of repossession.
Many of our clients found us by searching for “how to sell a house at auction” but after careful consideration, felt it would be too intense and stressful for them at this juncture in their lives.
Property auction fees can be expensive!
Property auction can be expensive, so it’s worth weighing up the options order to get the best deal. So, how much does it cost to have an auction? Many auctioneers are shy of telling you this upfront.
You have to put in a very low guide price which is often way less than a property is worth in order to attract bidding.
The auctioneer gets their commission from a 10% deposit, regardless of whether or not the sale goes through. You do not get the balance of completion until the buyer completes the purchase – a practice they do not tell you about.
Watch out for the so-called “Modern Method of Auction”, this is where sellers are told there are no auction fees when, in fact, they are charging the buyer an eye-watering £9,600 including VAT which is called “buyers premium”. Therefore, any sensible buyer will pay £9,600 less to you as they take into consideration their maximum bid price. Again if the buyer can’t complete, the auctioneer gets paid and not you. The £9,600 fee is theirs to keep no matter what happens.
No guarantee of a sale
When it comes to selling a house at auction vs a discreet sale, you are taking a chance. There are no guarantees that your property will sell at all. However, Property Saviour does guarantee to buy your property or rental portfolio from you.
If the property doesn't sell... you still have to pay
Auction fees are chargeable just to list your property. Auction sales are never guaranteed. If you don’t get a successful sale, you still lose a chunk of money and you’ll have to start all over.
Buyers may be financially unsuitable
When it comes to the financial status of the buyer there is no contest between selling a house at auction vs a discrete cash sale. For the purchaser, prior to buying a house at auction they need to secure finance. And it can often take an entire month – if it goes through at all. If they struggle to get finance, your house sale could fall through.
With a solid reputation in the property sector, Property Saviour guarantees to have the money available to buy your house for cash. We don’t need mortgages or investors. We’re ready as soon as you are.
Auctions can mean a long wait
Auctions are not necessarily a quick way to get rid of your property. With two or three months between auctions, the whole process can drag on for months.
Once you sell your property via auction, you will only get 10% of the sale price as a first payment minus auctioneer’s commission. You will usually have to wait a month for the rest of the funds. If a 28-day wait for your money seems an awfully long time, then there is another way.
With a discreet sale to Property Saviour, the cash is in your account in under a fortnight. Which would you prefer – 14 or 28 days?
Contract lock-ins are common
You could find yourself locked into a contract for up to 3 months – but the auction house may not readily advise you of this. With a discrete sale to Property Saviour, expect no lock-in period and no obligations.
Lack of proactive marketing
A big problem with selling a house at auction vs a discreet sale is that the auction limits the number of interested parties. And, despite paying for marketing, your auctioneer will do very little to help your house sell. They won’t market it properly unless you pay staggering fees.
Not all auctioneers are living in the 21st century. Some will only have an auction guide that is posted to people on their mailing list. You might just get lucky if they will advertise your property on Zoopla!
A for sale board on its own is not enough. Each property has to marketed on specialist property portals – and ideally an aggressive ad campaign on Facebook to maximise the exposure.
This lack of proactive marketing can result in a disappointing sale price, or worse, no sale at all.
You'll need to move out quickly
As auctions have a strict timescale for the completion and handover of the property, you may find yourself being forced to move out before you’re ready. You’ll need to consider your job requirements, children’s schooling, arranging transportation, removals and utilities.
If you sell to Property Saviour, we’re a bit more human and realistic. We’ll get your sale dealt with quickly and your money in the bank – but you won’t be kicked out before you’re ready. We give you a rent free period to allow you time to plan your move.
We can sell your house at auction for you
When you don’t feel you have the time, patience or knowledge to sell your own home at auction, Property Saviour can take over and sell it for you.
Having good links with professional auctioneers across the UK and a portfolio of previously sold properties, we know the pitfalls, processes and how to get you the best price.
Whatever condition your property is in – be it structurally unsound, completely trashed or just in need of updating. Our team of experts will be able to market its selling points and features to a range of appropriate buyers in advance of it going under the hammer.
Why sell for cash instead of risking the auctions?
Only Property Saviour can guarantee to buy your home and complete the paperwork within a couple of weeks – and pay the legal fees. You won’t have to market your home, and you won’t have to worry about anything. You won’t get this from an auction house.
Located in North of England, we’re a Leeds-based firm and are a lot more competitive than house buying services in London offering the same range of solutions. So no matter where you live, chat with us to find out more about your rights and what to expect from our team of property experts. We could be the most suitable service, no matter where in the UK you live.
The main reasons people usually give for selling a house at auction vs a discreet sale is that they think that selling a property at auction will give them a better price. But this is not always true. Some properties may not be right for an auction – whereas Property Saviour will buy your house whatever the circumstances.
Why not simply call us for a chat about your current situation. It won’t cost anything and it’s a great opportunity to find out where you stand! You can also visit our blog where you’ll find more step-by-step property guides and the latest property news.