How do I sell my house at auction?
What are the advantages of selling my property at auction?
If you’re looking for a fast sale and certainty that a buyer won’t pull out then auctions are a good way to go. Once the hammer falls the buyer has to put down a 10% deposit, then they have a month to give you the remaining 90%.
Demand from multiple buyers can help quickly drive up the price, especially when they’re all in the room/online together desperate not to miss out on the chance to own your property.
If you have an unusual or run down property you may find it hard to advertise to conventional buyers but auctions are a great way to appeal to investors, professional buyers and people looking for a project who will know enough about the market to understand the value of your property.
If you need to sell up quickly – perhaps you’re moving out of the area or you need the money urgently – then an auction may also be for you. As long as there is enough interest and you’ve set a realistic price your property should hopefully be sold by the end of the auction.
How much will selling at auction cost me?
You should expect to pay your auctioneer around 2-2.5% of the price you get for the property and you also need to find out if there will be advertising costs.
You will also need to pay a solicitor to help with the legal side prior to the auction and on the day. Solicitors fees vary so shop around for a good price and service. Often the auction house can arrange the legal pack for you or at least recommend a solicitor to you.
How do I choose an auction house?
Look at their promotional material for other houses – do you trust these people to show your property in its best light?
An established auction house might be more expensive but it is also more likely to know how to market your property to the maximum number of potential buyers.
You might find though that a less well known company is more accommodating and cheaper, so you’ll need to shop around and weigh up the pros and cons.
Offerpal can place your property out to auction and make sure the process runs smoothly for you.
Can I accept offers before the auction?
If a buyer tries to persuade you to sell before going to auction you know they’re keen, you may want to let them fight it out with all the other potential buyers or you may want to just agree a price with them and know you have sold.
It does make more sense to let the auction go ahead. If they really want it, they’ll make the same offer during the auction but you;ll also get the added security or the 10% deposit.
There’s also the worry that the buyer knows something you don’t, so putting the property up for auction might give you a more realistic idea of what people are willing to pay.
How do I set the reserve price?
Your reserve is the lowest price you will accept – this is kept private between you and the auctioneer. If all the offers are lower the auctioneer will withdraw the property from the auction.
If someone offers your reserve price or above the auctioneer will drop the hammer and you won’t be able to back out, so think it through.
If your house has been on the market already and you haven’t had any offers for the price you wanted, maybe you’re being unrealistic and you need to lower your expectations before going to auction.
If you’ve set your reserve a bit too high, you can still negotiate with a buyer after the auction. Most auction houses will also offer to put the property into the next auction at no extra cost, so you can correct any mistakes you made first time around.
Again, Offerpal can hold your hand through this process.
How do I set the guide price?
Your auctioneer will help you with this – it’s the price that the public is allowed to know and you can use it to attract potential buyers. It’s just an idea of what the house is worth, so even if you put it lower than the reserve you won’t have to accept it.
Anything else I need to do before auction?
The auction house should be doing their best to market your property but you should assist by making the property as attractive to potential buyers as possible.
Obviously it’s in your interest to make sure the property is looking its best and open for viewings from prospective buyers in the weeks leading up to the auction.
How quickly will the sale go through after auction?
One of the benefits of auctioning your home is that it’s quick – it might take just a month to go up for auction, then the sale could be completed within 28 days. But this also means you need to be ready to move quickly once the sale has been made. Once the auction has finished, the sale is legally binding so make sure you’re fully prepared before you agree to the auction date.