Many owners who want a quick sale put their homes into a property auction. It is seen as a quick way of selling homes, without all the hassle and stress of trying to sell in the open market.
Sellers do not have to get involved in long property chains when using auctions. Also if they do get a buyer, the purchaser needs to pay a deposit there and then and complete on the transaction in a certain period, usually a month. Sellers can also include anything they like (within reason) in the auction pack. One increasingly common clause is that the buyer also needs to pay the seller’s auction fees.
There are a number of property auctions throughout the country and for some of them, they can be reasonably well attended. Even if they are not, buyers can put in bids online and down the phone. And during lockdown, some of the auctions have been 100% online.
So are there any negatives to selling at auctions?
- Time to go before the next auction
As above, there are a number of auction houses in the UK. But most seem to hold their auctions every 2 or so months. You would think that because there are quite a few, that would not be an issue of having to wait for the next auction because there would always be one sometime soon. But every time I check, there seems to be quite a wait until the next local auction is occurring.
- Property may not get a buyer
Just because you put your property into an auction it does not necessarily mean you will get a buyer. The auction may be poorly attended or of those that do turn up, there may be no one who is interested in your property. In such a case you may have paid around £540 to place the property in the auction for nothing.
- Property may get bids, but they do not meet the reserve price
You will set a minimum reserve price that you would be willing for the auction house to accept on your behalf. This is not disclosed to the buyers in the auction. There may be bids on your property therefore, but they may not meet your reserve price. In this situation, again the seller would have no buyer and wasted costs.
4 Property will usually sell at a discount
Generally speaking, sellers will get less at a property auction than they would at an open market. They may get lucky if there is frantic competitive bidding on their property with people getting carried away, but usually the final bid is less than selling through an estate agent.
- Transaction may not complete
Just because someone wins the bid (which is higher than your reserve price), they still need to come up with the money to complete the purchase. This does not always happen as there are no guarantees. This would be a problem if the seller needs the purchase price urgently. There is a silver lining though as in such situations the seller would get to keep the deposit.
Selling at auction is one option to get a quick sale of your property. But a far quicker option is selling to a quick buying company which can sometimes complete in as little as 7 days. If you would like a quick sale, please do contact Quick Property Buyer for an instant cash offer.