How to sell a house at auction
If you are thinking of selling your house, have you considered selling it at auction? Though it may not be the first option that comes to mind, there are some great advantages to selling your house at a classic bid and hammer or Modern Method of Auction (MMoA).
What are the advantages of selling my house at auction?
Selling your house at auction can be a good idea if your home is in a state of disrepair, if it has not been successful on the open market, or if it is an unusual property that could attract unconventional buyers.
1. Auctions can be fast
A typical real estate transaction may take months to complete. But when you sell at auction, the entire process can sometimes be wrapped in a matter of weeks.
From start to finish, an auction sale can be completed as soon as a month, but it will usually take a minimum of two months. This factors in four to six weeks leading up to the auction, the sale process, and a month afterwards to wrap up the legal side of things. So if you need to sell fast, you may want to consider a property auction.
2. You set the terms
When you sell your house at auction, you get to set the terms of the sale. This means that you choose the date of the auction, the reserve price (the minimum amount that you’re willing to accept for the property), and any other terms and conditions that you want to include in the sale.
This gives you a lot of control over the sale process and ensures that you get exactly what you want out of the transaction.
3. Your sale is secure
Buyers must pre-qualify for financing and submit a deposit before they can participate in the auction. This ensures that only serious buyers participate in the sale, which reduces the likelihood of things going wrong.
What are the disadvantages of selling my house at auction?
When it comes to selling your house at auction, it’s important to be aware of any potential downsides before deciding if it’s right for you.
1. Higher fees
One downside is that you may not get as much money for your house as you would if you sold it through an estate agent.
Auction houses typically charge a higher commission than agents, so be sure to check how high these fees will be before agreeing. Although, some auction houses offer a buyer pays fees option.
You will also have to set a reserve price – the minimum you’re comfortable selling the property for. If an offer is made below the reserve price, the auctioneer will bring it to you but you are under no obligation to accept. However, if you are in a rush to sell your house and this is the only offer you get, you may end up selling your house for less than you anticipated.
2. Tighter timescales
Auctions are typically faster than traditional agent routes, which means that the entire moving process is also accelerated.
Once your property sells, you will likely have to move out relatively quickly, which may be disruptive if you’re not already prepared to move.
3. Lack of control
Finally, selling your house at auction means that you will have very little control over how much your house sells for.
At an auction, your house could sell for as little as 70% of its market value but may sell for 10% more than its market value. You should make sure you’re comfortable with the risk before going ahead.
Tips for selling a house at auction
Like with every property sale, you still need to factor in the cost of selling your house and make sure you take the right steps when it comes to the auction process.
1. Choose the right auction house
Not all auction houses are created equal. When choosing one, be sure to ask about their experience, fees, and marketing budget. You should also make sure that the auction house is a good fit for your property type.
2. Set a reserve price
A reserve price is the minimum amount that you’re willing to accept for your property. Once the bidding starts, the auctioneer will not sell your property for less than the reserve price.
Knowing how much to sell your house for is often the trickiest part of the house sale process. But it’s important to set a realistic reserve price so that you don’t end up disappointed if your home doesn’t sell for as much as you wanted. Getting a free, in-person property valuation may be useful to help you decide how much you can sell your house for.
3. Hire a good estate agent
Selling your home at auction is not something we recommend doing alone. You may want to hire an experienced estate agent who knows how to navigate the auction process. Be sure to speak to a few different agents before making your decision.
4. Prepare your home for sale
Just like with any other type of sale, it’s important to make sure your home is in tip-top shape before putting it on the market. This means repairing any damage, deep cleaning every room, and decluttering each space.
Right before bidding day, your property will have to have viewings, surveys and potentially an open house too. Use this time to stage your home so that potential buyers can visualise themselves living there.
Staging your home usually includes a deep clean, a declutter and depersonalisation – this means removing any of your photos or heirlooms. You could also add some fresh houseplants and light a few candles to make your property feel more inviting to potential buyers.
5. Market your home properly
Marketing is key when selling your home at auction. You’ll need to spread the word about your upcoming sale through print ads, online listings, and open houses. The more people who know about your sale, the better chance you have of getting a good price for your property.
Some auction houses include marketing as part of their service, so if you want that taken care of for you, make sure it’s covered when you choose your agent.
How much does it cost to sell your house at auction?
The fees for selling your house at auction are typically around 2-3% of the final sale price, plus VAT. This usually includes the cost of advertising the property and marketing it to potential buyers (although this is not always the case, so be sure to check).
You will likely need to pay for any necessary repairs or renovations before putting it up for sale, however, you’ll need to cross this bridge no matter how you choose to sell your property. Make sure to budget for these costs.
Auction house services
Another thing to consider is what kind of services the auction house offers.
Some auction houses will only handle the actual auction itself, while others will also help with things like marketing your home and setting a reserve price.
If you’re not familiar with the process of selling a home at auction, it’s probably a good idea to choose an auction house that offers more comprehensive services. That way, you can be sure that everything is taken care of and that you have the best chance of getting a good price for your home.
Property and auctioning services with Mansons
Whether you are thinking about selling your property with an estate agent or at an auction, here at Mansons we can help.
We’ll make sure you find your perfect home and advise appropriately when it comes time for purchase. Our practical advice and respected estate agents will reassure you of the best way forward when it comes to auctioning your home. Plus, we can list your home on our website, and market it through our channels, as well as on property listing sites, Rightmove and Onthemarket, getting the most reach in time for auction day.
