Selling at property at auction - the process explained.
Selling a property at auction can be an efficient way to ensure a quick sale, often bypassing the lengthy negotiations associated with traditional selling methods.
Auctions can be particularly suitable for selling properties that are unique, require repairs, or when personal situations demand a rapid sale.
In this article, we explain the process of selling a property at auction.
Types of property auction
Traditional auctions
A traditional auction, sometimes referred to as a standard auction, is where a buyer pays you, the seller, a 10% deposit and contracts are exchanged immediately after the winning bid. Both you and the buyers are then committed to complete the sale, usually within 28 days of the successful bid.
Modern auctions
With a modern auction, the buyer will pay you a reservation fee of around 5% on winning the auction. You must then exchange within 28 days, and complete within a subsequent 28 day period (56 days on total).
Selling at auction
The following are the key steps when selling through an auction:
Step 1: Choose an auctioneer or estate agent specialising in auctions
Selecting the right auctioneer or estate agent is critical. The more potential buyers you reach, the greater the chance of selling for the best price. A company with a strong track record in auction sales and nationwide marketing coverage, will help reach the most potential buyers.
Step 2: Get an auction appraisal
Your chosen auctioneer will assess your property’s value and potential in the current market, advising on whether an auction sale is the best route for your situation. Most auctioneers offer a free appraisal.
Step 3: Decide on a guide price and a reserve price
Setting a realistic guide price. is essential to generate interest before the auction.
The reserve price will ensure that your property doesn't sell below the minimum value you are prepared to accept. These prices will be guided by your auctioneer, but you should do your own research on your property's value as well.
For more information n valuing your home, see:
How to accurately value a home in 4 easy steps
Step 4: Instruct a conveyancing solicitor
You will need to find a solicitor well in advance of the auction. Your solicitor will need to prepare a property auction legal pack, which includes key documents like the title deeds, contract of sale, property searches, and the property forms. The pack is made available to prospective buyers for review before the auction.
Some of these documents (searches. in particular) can take weeks to obtain. The sooner the pack is available, the sooner serious potential buyers can start to properly consider your property.
Instructing a solicitor before the auction also ensures that the legal process can start immediately after the auction - critical if you are going to achieve the 28 day completion deadline.
Step 5: Prepare your home
Potential buyers will view your home in the run up to the auction, and presentation can significantly impact your auction outcome.
Prepare your home to make the best possible impression on potential buyers, addressing any minor repairs or cosmetic issues to enhance its appeal.
Step 6: Marketing your property
Pre-auction marketing is key to attracting the biggest number of potential bidders. Your auctioneer will typically advertise through their existing applicant database, as well as online platforms and other networks.
Step 7: Auction day
On the day of the auction, your property will go under the hammer. You can attend the auction if you want to, but this is not usually necessary. Your auctioneer will manage the bidding process, aiming to achieve the highest price above your reserve.
Step 8: Your solicitor completes the sale
After the auction, the solicitor coordinates the immediate exchange of contracts and completion (in under 28 days), ensuring that any outstanding mortgage on the property is settled and that the proceeds of the sale are correctly distributed to the seller.
The solicitor acts as the main point of communication between all parties, making sure the transaction proceeds smoothly and within the stipulated time frame.
