Did you know you can sell your property by auction quickly and for a great price – with almost no risk of the sale falling through?
Auctions have moved with the times and are now not only slick and modern, but accessible to every type of property, every type of buyer and every type of seller. Because it’s such a fast and efficient way to get moving, a growing number of private homeowners are choosing to sell their property this way.
Read on to find out why.
Busting the myths
There are many myths about auctions, so let’s start with picking those apart.
With auctions, you CAN...
…sell at the price you’re happy with. While your auction valuation may be a little lower than you expect, this is to encourage competitive bidding, which can drive the final selling price up and beyond your expectations. You are protected by the reserve price you agree with the auctioneer – and your property will not sell below this. The price advertised is called a guide price and must be within 10% (higher or lower) of the reserve, to give bidders a realistic idea of how much you will accept.
…buy a property with a mortgage. Another myth is that you need cash to buy in an auction. In fact, many people buy auction properties with a mortgage or use a bridging finance provider.
…sell/buy any type of property. Many expect that a property that’s bought or sold at an auction, will be run down, when in fact, you can find all kinds of property types for sale.
Here are three examples of properties across the UK that have sold by auction:
The Midlands: A three-bedroom detached house in Birmingham was sold at auction as the seller was relocating. The starting price was £360,000 and after 50 bids the sales price landed at £428,000 to a buyer looking to complete the purchase with a mortgage.
Wales: In this example, a two-bedroom cottage in Rhyl, which previously was a buy-to-let investment, was bought by a cash buyer at a price of £227,500. The starting point was £140,000 and the property received 113 bids.
The South East: Right by Leigh-on-Sea, the seller chose to sell their two-bedroom terraced house at auction as they were moving into a new property. Bids started at £255,000, and after 26 viewings and 53 bids was sold to a buyer with a mortgage for £300,000.
What are the benefits of auctions?
Whether you’re a buyer or a seller, auctions are ideal if you are keen to get moving, and there are many reasons why you might want a speedy sale. For instance, you may have found your dream home and don’t want to risk losing it. With auctions, you can set your own timetable – and reach completion within just a few weeks. Depending on the type of auction you choose, completion can take place in just 28 days.
As a seller, auctions can offer you a sense of security, as buyers who make the winning bid are committed to the property, and pay a non-refundable Reservation Fee to secure it.
As a buyer, you benefit from a speedy and straightforward buying process that is transparent and offers competitive pricing.
Looking for expert guidance on selling your property at auction. Talk to us today or read our guide.
What are the different types of auctions
There’s a great deal of flexibility and choice available when you sell your home by auction. Your property can be part of a multi-lot event conducted by an auctioneer, live-streamed to a nationwide audience of committed buyers, or marketed online with 24/7 bidding, depending on the type of auction you choose. Through auction, both parties are committed to the sale so you can rest assured that the transaction is secure with only 5% chance of a fall-through, versus some regions having a 30% chance using the traditional method of selling or buying a property (also referred to as Private Treaty).*
Let’s now dive into the two main types of auction.
Traditional Auctions
The Traditional Auction’s process allows for 28 days to complete. While it is a more rapid process than the Modern Method of Auction, this does mean that interest is usually limited to cash and investment buyers.
The Modern Method of Auction
The Modern Method of Auction (MMoA) takes the best bits of both Traditional Auctions and Private Treaty sales to give more flexibility. This method can see contracts exchanged and completed within a 56-day timescale**. MMoA opens auctions up to more buyers than ever before, as its timescales allow extra time for arranging finances, making it suitable for buyers who need a mortgage, as well as cash buyers.
The beauty of auctions is that everyone’s a winner, achieving a great price for your property, quickly and with no hassle, while the buyer benefits from the speed, certainty and full transparency.
