Are you thinking about selling your house at an auction? This can be a great way to sell your house, but it is best to be armed with the information you need to make the right choice. Auctions are a common way to sell property from homes to land and happen in all major towns. Compared to selling a house privately on the market, an auction can take you from giving your details to a sold house in just a month. This is compared to selling a house privately that can take months or even years. So, what do you need to take into account when deciding if an auction is the best choice for you?
A good first place to start is by reviewing the state of the market. A market that is rapidly changing can make for an excellent time to sell at an auction, as people are less willing to make the decision to buy through the traditional market. The added benefit of selling at an auction is that you can set a reserve price so that unless bids go over your limit, the house will not be sold. This means that you can ensure that you get the amount that you want for your house, but are far more likely to sell in a slow or changing market.
If you are trying to sell a property that is in high demand due to its location or because it is unique and interesting, then an auction could be a good idea – for some good examples of this check out Supreme auctions, which has some great properties listed. In addition, if your house is clearly popular, then having several buyers bid on the property will increase the price, often over what you may have had it valued at the traditional market. In addition, if you have a property that needs a significant amount of investment to make it likely to sell on the market, then you should consider an auction. Often when selling properties privately, that buyer will ask for the property to be repaired to a certain standard before they will buy it. This means costs for you as a seller that will eat into the money you see at the end of the transaction. An auction gives no right to negotiate, and the buyer gets the property as it is. This leads to many ‘flippers’ to attend auctions that are willing to spend the money to bring the value of the house up. If you want to sell a property without having to invest, then this is the perfect option.
There are also a few personal situations that may make auctions a preferable option when looking to sell. The first is if you are downsizing or have a move scheduled – this may mean that you need to free up your capital quickly to ensure that you get the new property that you want. An auction is a good way to get a hold of this without having to wait for months in a private sale.
As mentioned, you may also have a property that needs a significant amount of work and investment to make it a home. In this case, a good option would be to list the house for auction and have the buyer take it as seen, so you do not have to waste any time or money making improvements.
What is the process of selling a house at an auction?
Step 1: Timeline and approach
Selling a house through auction is quite different from selling privately, with the main difference being the timeline. This will be the first thing that you’ll need to ask about and decide with the auction house that you select. You’ll generally have a consultation where your situation is discussed, along with your expectations for sale. Most auctions take between 30 – 45 days from start to finish, and you’ll get a full overview of this before you need to commit. There are two different options when it comes to the type of auction, one where a reserve is set and another where there is no reserve. For the seller to win the property, their bid must be above the reserve that you have set.
Step 2: Promotion
The next step is the promotion of the house in the auction that you have selected. This will start with getting professional photography, house plans, and details about the property to use in the marketing materials. Before this happens, it is worth checking out this guide to getting your house ready to sell, as a well-presented house can make all the difference. With the marketing materials, all set then often a ‘saturation marketing’ approach is taken where many channels are used for marketing the auction and your property at the same time. This might include direct mail, emails, websites, and more. In addition, a catalog is created for interested buyers to get more information. With this, they may want to book viewings of the house and have inspections take place.
Step 3: The auction
After the marketing and viewings are all complete, the day of the auction will begin. It is a good idea to get there early so you can get a feel for the venue and answer any questions if you are needed. The auction will start, and your property with have a predetermined lot, where people will bid with the property going to the highest offer if the reserve price is met. Congratulations! You just sold your property. There is a 10% deposit minimum needed for any property sold, which needs to be available immediately to confirm the sale, and then the paperwork can begin. The auction house will assist in ensuring that all of this is done correctly and efficiently, and will work with your solicitors to make sure that there are no issues.