Auctions are an attractive option if you want to make a quick sale and, hopefully, achieve a high price for your property. But there’s no guarantee your home will sell and there are costs involved which will impact the amount you make.
An alternative is to sell your house to us. We specialise in completing housing transactions quickly, in just seven days if necessary. What’s more, there are no solicitor or estate agent fees to pay when you work with us.
Auction fees and charges
There are three costs you will have to cover if you sell your home with an auction house:
- Entry fee – Auction houses charge this to cover costs such as marketing your home in its auction catalogue and on online property sites. This is usually between £200 and £500.
- Legal costs – You’ll pay for a legal pack to be put together which will include documents such as title deeds and property information forms. These range from £200 upwards depending on how straightforward the work is.
- Commission – The auction house will take a percentage of the final sale price, often between 2% and 3% plus VAT. This is more expensive than estate agents who usually charge between 1% and 2%.
Why choose to sell at an auction?
There are definite pros to using an auction house. The room will be full of committed buyers who know the market. They’re often developers or people keen to take on a DIY project who won’t be put off by a house that needs lots of work. If you’re struggling to sell your home on the open market this could be a good option.
Because everybody is bidding openly this can sometimes drive the price of your home up (but this isn’t always the case). It’s also a transparent process – you aren’t relying on an estate agent to tell you who has offered what.
Selling a property in this way is usually faster than working with a traditional estate agent. Your home will be entered into the auction around four to six weeks before it takes place, giving time for it to be marketed. Exchange takes place on the day of the auction, if there is a buyer, with the sale completing around four weeks later.
Before the auction, valuers from the auction house will visit your home and suggest a guide price to be included in their catalogue. A reserve price is also set, below which your house will not be sold, so make sure you’re comfortable with this value. Potential buyers in the auction are usually not told what this is.
Things to bear in mind
As we’ve mentioned there is no guarantee your home will sell for above the reserve price. If it doesn’t the auctioneer may ask interested buyers to give their best bids afterwards. If the bids are still below the reserve price the seller will be asked to consider them, but they do not have to accept any.
Whether a home sells or not, the seller will still have to cover the costs of the legal pack and entry fee. However the auction house may be able to give the property a slot in a later auction. If the hammer falls and a home is sold neither the buyer nor seller can pull out without incurring penalties since this is usually when contracts are exchanged.
You should also be prepared to host several viewings leading up to the auction and be able to move out quickly once the sale takes place.
Choosing an auction house
The cheapest won’t necessarily be the best for your home. Research each auction house you’re considering, find out how they market the homes in the auction, what their level of local market knowledge is and how professional their catalogues are.
If your home would make a good buy-to-let investment it may be worth putting it up for auction in a different location, such as London, where there may be more investors.
Online auctions have started to become more popular because of the reduced costs they offer. But they won’t provide the same face-to-face service as a local auctioneer. However, the shift to digital is likely to be accelerated by coronavirus since many auction houses have been forced to move their operations online.
Working with us
Although an auction may move a transaction along quickly, it can still be a stressful process. There are documents to organise and no certainty of a sale or the price your home will get.
We’re experts at relieving the stress of a housing transaction by taking on many of the hassles involved. We organise valuations as well as instructing and paying for solicitors, so there are no fees to pay when you work with us. And once we’ve agreed on a final price for your house and a completion day, we’ll stick to them, giving you peace of mind.
If you’re looking for a quick home sale because of an unsettling life event such as divorce or inheritance, we’re also experienced dealing with situations like this sensitively. We’d be happy to chat about the service we offer, so please get in touch.