Successfully selling property at auction, to clinch a quick sale, comes down to a few key points. Property auctions are more stressful for buyers but our Six Top Tips will ease you on your way to a quick sale at auction.
One – the suitability of your property
Auctioneers will advise you on the suitability of your house for auction. Some key indicators are whether:
there is strong rental demand in the area
your house requires work or has development potential
your house is one-of-a-kind or unusual
it's a property likely to attract first time buyers
the property has a problem or "issue" such as a short lease
it's priced for a quick sale
whether the property has existing tenants
Many potential buyers are put off buying a property without vacant possession. If your property will have tenants in situ in the run up to the date of the auction try to come to an arrangement so the property is at least accessible for block viewings.
Two – location, location, location
Selling property at auction requires a consideration of the location of the auction in relation to your house and the type of buyer likely to be attracted to it.
All things being equal - if timing allows pick an established local auction or a London auction. Some of the London auctioneers are strong in particular parts of the capital. Many regional auctions have a loyal following.
If your property is located outside London and is a marginal candidate for auction, you are best advised to seek out a strong local auction that will attract buyers looking for well priced homes in the area.
Three – understanding your legal obligations
Your sale will proceed more smoothly if you use a lawyer familiar with the Common Auction Conditions. Prepare the legal pack for the property in good time to attract interest prior to the auction.
A basic requirement of successfully selling property at auction is getting the description of your house in the auction catalogue correct. Be aware that it is your responsibility to make sure the description of the property in the auction catalogue is accurate. If it’s not, it may give your buyer the right to pull-out and claim the return of their deposit.
Four – pricing your property
The Common Auction Conditions allow you to bid on your own property up to the reserve price. Make sure you understand the implications of this, and the auction house’s attitude to setting reserve and guide prices. The lower your reserve price, all things being equal, the more competitive you can expect bidding to be.
Five – pre-auction offers
About 10% of properties selling at auction are sold before the day of the auction itself.
As you’re selling a propery at auction as a means to a quick sale, emphasise to the auctioneer that you are interested in pre auction offers. On a practical level, at viewings, auction staff are often asked whether the vendor is likely to be open to offers. Getting the word out early helps, especially with the smaller London and regional auctions.
Six - read the small print in the auctioneer’s terms
If you are unfamiliar with selling property at auction it might be worth asking your lawyer to look over the auctioneer's terms to identify any restrictive clauses.
This is especially true if your house is already on the market with an estate agent and you’re looking for a quick sale. A close inspection of the terms will reveal whether you might be liable for two sets of fees if the timing of the contracts overlap. Also watch for the time frame covered by the terms eg the length of time it covers post-auction.
So..selling property at auction is relatively straight forward if you have the right kind of property, pick a suitable auction and attend to the paperwork.