Category: Guides & Advice, Seller
Auction conveyancing for sellers
When selling your property at auction, you can sell it quickly and get a guaranteed sale.
Auctions are a great way to sell properties. Especially if they're unique, need repairs, or if you have a personal situation that requires a quick sale.
If you're planning to sell your property at auction, you should be aware of all the relevant details.
We will guide you through the auction process and explain how everything works to help you sell your home quickly!
Why sell a property at auction?
Selling at auction can be an ideal choice when looking to quickly move out and secure a buyer. Auction conveyancing is an accelerated sales process that offers transparency and certainty.
Auctions attract experienced bidders or individuals seeking for a property renovation project. They will understand the potential value of your property. It could prove beneficial if your property is unique or has some specific conditions.
Auctions are competitive and attract multiple buyers. It can quickly increase the price of your property. You have the potential for achieving top market value.
You could try selling your property through auction if you need money quickly. Provided there's enough interest and it has an acceptable selling price, it should sell before its scheduled end time.
Two different types of property auction
Traditional auctions
Traditional auctions (also called standard auctions) tend to be preferred by experienced investors or cash buyers as they're less flexible and take place over a shorter time frame.
It involves buyers paying you, the seller, an initial 10% deposit. Then, you are exchanging contracts as soon as the gavel drops.
Once successful bidders have exchanged contracts they are committed to complete within 28 days from winning the bid.
Modern auctions
The modern auction gives the buyer more time and flexibility. It runs online and usually for a duration of 30 days.
Modern auctions typically charge buyers a reservation fee of approximately 5% when their winning bid is accepted.
They are followed by exchanging contracts 28 days later and completion 28 days thereafter (56 total days for completion).
What are the costs of selling a property at auction?
Your auctioneer typically charges 2.5% of your sale price as commission. But this varies depending on who you hire.
Some auction houses and estate agents might operate auctions under a 'no sale, no fee' agreement.
You might have to advertise your property to help with the sale. Even if there's nothing happening with the sale and nothing comes of it.
As part of your property sale costs, it will also be necessary to hire a solicitor or conveyancer. They will manage and oversee all legal aspects associated with selling the property.
How to sell a property at auction?
We'll go through the steps to prepare your property for sale at auction, but also explain the sale auction process.
Choose an auctioneer or estate agent
It is important to choose the right estate agent or auctioneer. You have a better chance of getting the best price if you can reach as many potential buyers as possible.
You want to choose a company that has a proven track record of auction sales. Even better if it has a nationwide marketing campaign with a larger reach.
Hire a solicitor or conveyancer
You'll need to hire a solicitor or conveyancer to do all the legal work. In contrast to a traditional sale, the legal work is done in advance (before an agreement is reached).
They'll pull together all the paperwork necessary to sell your property. This is known as the legal pack and is made available to buyers before the action.
Your solicitor will then ask you to bring out recent surveys and valuations on the property.
Finally, they will draft a contract to have it ready for the potential buyer.
Decide on a guide price and reserve price
You will need to set a guide price and a reserve price.
A guide price is the price advertised to buyers when they check on your property. It gives buyers an idea of the value of the property.
The reserve price is the lowest price that you will accept for your property. The reserve price can be kept secret between you, the estate agent, and the auctioneer.
Prepare your property
The presentation of your property can have a significant impact on the outcome of your auction.
Prepare your property to give the best impression to potential buyers. Address any cosmetic or repair issues.
Market your property
To attract the largest number of bidders, pre-auction marketing will be key. Your auctioneer will advertise through their applicant database as well as other online platforms.
Potential buyers may want to inspect the property before the auction. Viewings of your property will take place so buyers can check it out.
Auction day
On the day of the auction, interested buyers will gather at the auction or participate online.
The auctioneer will start the bidding process, with a goal to reach the highest price possible above your reserve price.
Complete the sale
Once the auction is over, the solicitor arranges for immediate exchange and completion. It usually happens within 28 days.
The solicitor acts as the main point of communication amongst all parties involved. He ensures the transaction runs smoothly and on schedule.
We can help you with selling a house at auction
Are you ready to explore the world of auction property sales? Our experienced team offers personalised service and supports you every step of the process.
Let us support you on the auction market so you can sell your property with confidence. Call us on or request a call back and our friendly team will be happy to help!
Alternatively fill the form below for a free quote and we will contact you shortly!
Frequently asked questions...
Having professional legal representation during the selling process is highly recommended to ensure an efficient and legally compliant sale process.
While professional legal representation may seem like an unnecessary cost initially, it will save time,
Once an auction bid has been accepted and property sold at auction, sellers are generally legally obliged to complete the sale.
However, should it not sell at auction, sellers have options including negotiating with bidders directly, relisting it on the market or withdrawing it altogether from sale - however it's vital that sellers fully comprehend and seek professional advice prior to considering such options as withdrawal after an auction.
if a property doesn't sell at auction the property will be moved into a 'post-auction sale' in which interested parties will be invited to make their highest offer on the property and the seller will decide if they wish to still sell.
If so, any post-auction sale will be agreed under auction conditions, with the same rules, agreements and fees applied as if the house sold during the original auction.
Therefore, if a house fails to sell at auction initially, it doesn't mean that it's time for the seller, nor potential buyer, to give up hope.
Selling at auction offers both advantages and drawbacks:
Pros:
- Speed: Auctions can be an efficient and fast way to sell real estate, typically occurring within weeks after making the decision to sell.
- Certainty: Once an auction concludes, its sale becomes binding for both seller and buyer alike.
- Competition: Auctions create an environment of competition between buyers, often driving up sale prices.
- Transparency: Auctions provide sellers with an accurate reflection of market value of their property.
Cons:
- Costs: There are costs associated with auctions, including marketing expenses and auctioneer fees.
- Risk of Underselling: If a property doesn't garner enough interest or reach its reserve price, it could sell at less than market value.
- No Cooling-off Period: Buyers typically need to commit immediately without the benefit of any cooling-off period, which may deter some potential buyers.
- Pressure: An auction setting can be stressful for sellers as their outcome remains unknown until their bid is accepted by a bidder.
Selling at auction ultimately depends on an individual's personal circumstances and preferences.
When the hammer falls, your top bidder has entered a legally binding contract that you both must follow through on. The buyer will have to pay 10% of the final price on the day of auction and pay the remaining amount within 28 days. If your buyer fails to pay the full amount by then, you have legal grounds to sue them for the costs of having to re-list the property.
The kind of property that sells well at auction are those in high demand which could attract many buyers, like London-based houses, also unique properties which are hard to value, properties which need to be sold quickly, or properties in a bad state of repair which need renovating.