The Pros & Cons of Selling Your House at Auction
It is often assumed that properties sold at auction tend to be problem homes or have been repossessed. However, this is a myth that is gradually being debunked. Anybody can sell or buy a home at a property auction and you don’t need to be a cash buyer either.
Property auctions are open to all and can be a great way to purchase a property. However, they do not suit everybody trying to sell their home. If you are considering selling your house at auction, read the below first and make sure you understand auctions fully.
What is a property auction?
You may have been to an auction house and bought a piece of antique furniture or lost out on a painting. A property auction applies the same principle, it’s just like eBay but in real life.
You might be actively considering selling your house at auction. However, some properties appear in auction catalogues because they are sitting empty due to the owner passing away, neglect or repossession.
How do I put my house up for auction?
You will first need to find an auction house that holds property auctions. Each auction house will produce property catalogues ahead of every auction, so collect a few from different auctioneers and suss which one you like best. Which auction house do you feel would paint your property in the best light? Some auctioneers will be more expensive than others, particularly if they have a lengthy history. You will need to weigh up the pros and cons of each before making a decision.
How does a property auction work?
If you go ahead and put your property up for auction, the initial steps will be similar to that of an estate agent; photographs and advertising. The catalogue of properties for your auction will be distributed months before the event date, giving people plenty of time to clap eyes on your property.
Your home will be listed with a guide price. This is what it is expected to sell for, and you can discuss this with your auction house of choice. You may also want to put a reserve on your property so that it does not sell below a figure you deem too low. Usually reserves will not be revealed until bids have closed on your property.
Pros of selling your house at auction
There is no denying that selling your home at auction can present a quick and easy sale, and there are other aspects of auctions that make them suitable for some property sellers. Typically, if you have a home in need of some serious renovation, auctions are a good place to sell as buyers are actively seeking project properties.
Similarly, homes with legal implications or unique properties often sell more readily at auction compared to the traditional market.
When it comes to money, the minute that hammer falls the buyer legally must pay you a 10% deposit by the end of the day. The remaining sum needs to be with you within 28 days, so you can rest assured you will get your money within the month.
Cons of selling your property at auction
Despite auctions having benefits for some sellers, there are some inevitable downsides to selling your home at auction too. If it’s a property you are residing in, you will quickly need to make alternative living arrangements; once the house is sold you need to vacate.
Whilst this can be stressful enough, you will also be subject to fees. You will need to pay upwards of £300 to the auction house to simply enter your home into the lots for the day, regardless of if it sells. If it does sell you will be paying the auction house 2.5% plus VAT in commission.
Considering you are paying considerable costs to the auction house, you’d expect your property to be marketed appropriately. However, some auction houses do not promote all properties fairly and you are unlikely to receive as many eyes on your home compared to selling with an estate agent.
The future of property auctions
Allsop, the UK’s largest auction house of commercial and residential properties held their first online-only auction in April 2018. As a property seller you will likely see the appeal of an online property auction:
- No costs towards room hire
- No catalogue printing fee
- Ease of inputting the property into another auction if it fails to sell
- Can easily reduce price or change reserve
Online property auctions have not become the norm in the UK yet, unlike auctions held in an auction house. However, it is expected that online property auctions will become increasingly popular over the coming years.
Quickest way to sell your house
Whilst property auctions have their benefits, they don’t suit everybody. If you want to sell your house quickly, without the associated fees of property auctions, you could benefit from getting in touch with WeBuyAnyHome today. We could sell your home in as little as seven days, even offering you a free, no-obligation cash offer online. Find out how you can sell your house fast and we will be in touch with you within 24 hours.