subject: Selling Your Property At Auction [print this page] Selling a property at auction is a good option for you if you are, for whatever reason, looking for a quick sale or have a property that you think would be difficult to sell under the conventional conveyancing route. Auctions are usually popular with houses that are in a poor state of repair, quirky or difficult to value, homes that have been repossessed by the mortgage lender, or properties that are in high demand.
You will need to be prepared and organised as once the auction has taken place, if a successful sale has been made, you will be required to vacate the property within 28 days.
You should research several auction houses to find the right one for you before making a decision. You will need to find an auctioneer who specialises in properties similar to the one you are wishing to sell and whose prices correspond with what you feel is reasonable for your property. If you choose the 'wrong' auctioneer you could lessen your chances of selling your property for a favourable price at auction.
It is advisable to set a reserve price prior to taking your property to auction. The reserve price will be the lowest price that you will be legally obliged to sell your property at. During the auction, if bidding does not reach this price you will not be obliged to sell your property, even to the highest bidder. You do have the option, however, to lower the reserve price (but not to make it higher). It can be difficult to decide what reserve price to set so, to help you make this decision, you should get your property valued by at least 3 different estate agents before setting the reserve price.
Make sure you are aware of the costs involved in selling your house at auction. You will need to pay advertising costs to the auctioneer and these costs will need to be paid by you regardless of whether or not your property is successfully sold at auction. You will also have to pay the auctioneer commission on the sales price of your property (which is usually 2.5% but you will need to find this out before signing the papers).
You will need to instruct a conveyancing solicitor, prior to the auction, to prepare the legal documentation relating the sale of your property (including the contract). You will also need to make sure your property is in a fit state for viewings to take place by prospective bidders.
At auction, as soon as the hammer falls, the sale will become legally binding and the new owner will be required to pay you 10% of the sales price there and then (the remainder of the money will become payable 28 days later when you vacate the property and the new owner takes possession).
Selling your house at auction can be quick and relatively straight forward if you are prepared and have done your research. The most important thing is to be confident when setting your reserve and make sure you are aware of the costs involved in selling your house at auction.
