23/8/23
Can I sell my property by auction?
POSTED 21/2/23
If you’re thinking of selling your property, auction can provide a viable option for certain properties. Here, we try to guide you through the process and show why you might wish to sell your property by auction.
If you’re looking for a quick sale, a transparent open-market sales process or genuine buyers, auction could be for you. It’s a common misconception that when selling a property by auction, you will be selling for less than the market value. This isn’t the case, as you are able to set a reserve price, meaning your property will not be sold for a penny less than what you would be happy to receive. There is even potential to achieve more than you were hoping for, as if enough interest is generated and a bidding war begins, you may see it go far beyond this.
Does it cost to sell at auction?
There are several options when selling by auction, which can include the seller paying no fees at all, with the buyer instead paying an additional buyer’s premium to cover the cost. Most buyers are happy to pay an additional buyer’s premium, however they are likely to factor this cost into their bidding, meaning you may end up receiving a similar amount versus you, the seller, paying the auctioneers fee.
Nicholas James Auctions do not charge a catalogue entry fee, therefore there are no upfront costs, with our commission taken from the sale proceeds. We therefore work similarly to most estate agents on a ‘no sale, no fee’ basis.
Get an appraisal.
Before you can list your property for auction, you will need to arrange for an auctioneer to carry out an appraisal on your property. During this consultation process, the auctioneer will advise whether your property is suitable for auction, as well as providing you with an accurate market appraisal. Knowing what your property is worth will also help you to set an appropriate guide and reserve price.
Set a reserve price.
Once you’ve received your appraisal, you will need to agree a suitable reserve price with your auctioneer. The reserve price is the lowest price you will accept for your property.
This process is generally collaborative between seller and auctioneer but it’s important to remember that if the reserve price is too high, the property is unlikely to generate the level of interest required to attract competitive bids.
Set a guide price.
The guide price is the price at which your property is marketed to potential buyers. This is something that your auctioneer will again help you with, to ensure it’s fair and will generate good interest.
Setting an attractive guide price may work in your favour to encourage bids and to drive up the ultimate sale price beyond what you had hoped, but it’s important to remember the reserve cannot be more than 10% over the guide price.
Marketing.
When you sell your property by auction, you get the added benefit of extensive marketing of your property. Once you have signed off your property details, then it will be added to the auctioneer’s website, as well as advertised on the major property portals such as Rightmove and Zoopla. This will include a description of your property, as well as professionally taken photographs. Your property will also be shared on social media and a specialist auction specific portal.
We will conduct viewings of your property (where appropriate), showing prospective buyers and hopefully answering any questions they may have.
On the day of auction.
All our auctions are now held online with buyers required to register prior to bidding. Once the bidding has opened on your lot, buyers have one hour to place their bids. Unlike eBay, bid sniping is impossible. All auctions will close as per their advertised ‘Auction End Date’, however if a bid is placed within the final 60 seconds of the auction end time, the auction will be extended by an additional 60 seconds. If a bid is placed in the bidding extension window, the countdown clock will immediately reset to 60 seconds again, and the auction will only finish when an entire 60 second bidding extension window passes without any further bids being placed. This ensures every bidder has a fair and equal opportunity to place another bid and the best price achieved for your property.
If the reserve is not met and your property not sold, it will be withdrawn from the auction.
How long will it take to complete the sale?
If a successful bid is made, then the sale is binding from the day of the auction, and you will exchange contracts. The buyer will provide a 10% deposit and will then have a further 28 days to complete their purchase.