Are you ready to sell your home? You might want to think about putting it under the hammer.
Auctioning is a popular method for selling a property as has been reported in a recent Guardian newspaper article, with the other top choices being to use an estate agent or to sell it to a fast home buyer. That’s because it can sometimes be a great way for homeowners to make a good profit with their sale, if several people are interested in buying the property and keep trying to outbid each other to purchase it.
There are many stories of people putting their homes under the hammer and then making much more with the final sale price than whatever value the auctioneer started the bidding. You just have to remember that this kind of home sale is somewhat unknown, and you never know exactly how much money you can expect to make, if your property even receives any bids. That’s why it’s vital that your budget for selling your home takes these outcomes into account.
When you auction your home, it’s much the same as auctions for items like antiques. You’ll get in touch with a specific auction company, also known as an auction house, and they will list your property with an opening price to start the bidding. Once someone places a bid at that price, the goal is that another person also wants to buy your property and so they then place a bid at a higher price. Ideally this continues until nobody places any more bids, and once the auctioneer says “going, going, gone” and brings down their gavel, your home is considered sold.
Hopefully the final bid is one that’s significantly higher in value than the opening minimum reserve price at which you listed your house or flat for sale. But what if you successfully find a buyer for your property at an auction? How long might it take to complete the sale?
Selling your home at auctions takes several weeks before and after
There are two key time periods to expect if you decide to sell your home via an auction. The first is the run-up to the auction taking place. When you get in touch with an auction house and agree to try selling your home via their services, it won’t be instantaneous.
Instead, the auctioneer will put together a listing for your property that typically includes photographs of the exterior and interior, written information about the key details of the home such as the number of bedrooms and its overall size, and the minimum reserve price. This is the lowest possible value at which you are comfortable with your property selling. The auctioneer will advertise this listing online, in local newspapers and elsewhere in the weeks before the auction taking place in order to generate as much interest as possible from potential buyers. You can expect this process to take about four weeks from beginning to end.
Then the auction itself takes place, and if your home receives at least one bid at the opening reserve price then that is deemed to be a legally binding agreement to buy the property. All that’s left is for your solicitor to work with the buyer’s legal representative to complete the legal documents required as part of the sale process, and the timescale for this can vary.
There are no specific rules for how quick an auctioned property sale must go. Many auction houses require that the winning high bidder completes the purchase of the property no later than 28 days from the date of the auction. Other auctioneers might require that this process is completed on a quicker schedule. For example, the auction house Athawes Son & Co which is based in London but sells properties in England, Scotland and Wales requires that its buyers must finalise the home purchase within 20 days after the auction.
If you’re contemplating using an auction to sell your property then you should contact specific auction houses to ask them what deadline they set for completing successful sales.
What are the specific steps involved with selling a home through an auction?
Should the timescale for selling through an auction work you, then it’s crucial that you also know the various steps involved with selling your home through this method. None of the steps are too complicated and you can usually expect a fairly straightforward process selling this way.
- Get several appraisals
At the start of the auction process, you should always ask several auctioneers to give you a free appraisal of your home, in which they’ll suggest a good minimum reserve price for the property as well as informing you of any fees they might charge.
- Instruct the auctioneer
When you select an auction house to sell your home, you have to formally instruct them to market your property for sale by signing their engagement terms. This is effectively you giving your legal authorisation for them to proceed with trying to sell your home.
- Prepare a legal pack
Next, you’ll have to get your solicitor to put together a legal pack that includes vital information for auction bidders about your home, including the results of any searches on the property as well as many other important facts about the home.
- Advertise the property
This is the responsibility of the auctioneer: once they have been instructed to sell your home and the legal pack is complete, they will advertise your house or flat on the auction house’s website and elsewhere to try getting the attention of potential bidders.
- Set a reserve price
You and the auctioneer will have to agree on a reserve price, which is the minimum value at which you can accept your home selling. Ensure that you set this price at a level you are comfortable with after the auctioneer’s fees are deducted.
- Host the auction
Again, this is the duty of the auctioneer but whenever the date of the auction arrives, they will be responsible for hosting it. Some auctioneers hold their sales held in-person, some are live-streamed online, and others combine both approaches.
- Complete the sale
If you are successful in selling your home at an auction, you’ll typically have at least 28 days for the winning high bidder to complete all parts of the process of purchasing your property. However, some auction houses will give the buyer more or less time.
There are quicker ways to sell your home compared to an auction
If the timescale for selling your home via an auction is too long for your particular situation, there are still some quicker ways to try finding a buyer for the property. For example, you could get in touch with a fast home buying company. These business, like the London-based LDN Properties, offer homeowners a simple and straightforward way to get competitive and speedy offers for selling their freehold or leasehold houses or flats.
One of the reasons why people use quick property buyers is that they can generally complete the entire process of purchasing a home within a handful of weeks – and that includes the homeowner receiving the proceeds and contracts being exchanged. This can be much swifter than the time it takes to wait before a property auction occurs and also face further delays if the home sells at the auction. And it’s often significantly faster to sell this way when compared to using an estate agent, where a property might go unsold for many months or more than a year.
Also, auctioneers will charge commission for the work that they do in finding a buyer for your property. But reputable fast buyers never charge such fees, so you could maximise your profit from the home sale by using them instead of trying your luck with an auctioneer.
The right decision will depend on your individual needs. Some homeowners prioritise selling their properties as fast as possible, whereas others are willing to take more time with a sale until they get the exact value that they want for their house or flat. If your main aim with selling your home is finding a buyer in the least amount of time feasible, you might want to think about using a quick property buying company instead of having to wait many weeks to sell via an auction.
However, if you can spare the time for selling your home through an auctioneer then it could be a good option with the goal of hopefully making a large profit from the sale.