Buyers turn to property auctions for several reasons.
To sell a house that’s in disrepair, for example.
Before choosing this channel, it’s worth understanding how property auctions work.
In this blog, we’ve answered some questions from the buyer and seller’s perspectives.
How do I contact an auction house about selling my property?
Many property auction houses can be found online (including auctions that take place online, too).
They often have a website with contact details and more information on how to work with them.
Most estate agents can point you in the right direction, too. They might have more insight on which auction houses are the most effective.
There are advantages and disadvantages to auction houses generally. However, finding the right auction house can make a big difference.
How do I sell my property at auction?
Decide a reserve price
Once you and the auction house agree to list your property, you must decide on a reserve price.
This is the minimum amount that you’ll accept from bidders. It is where bidding begins on the day.
Discuss fees with the auction house
At this point, you’ll discuss fees with the auction house.
They expect a payment for:
- Marketing costs
- Inspection of your property
- Legal fees.
In some cases, they might take this from your selling price.
But since they cannot guarantee how much (if at all) your property will sell for, they could demand it up-front.
Get your documentation sorted
You also need to give certain documents to the auction house at this point.
This might include proof of your identity and a copy of the title deeds.
Auction marketing stage
After the above steps are complete, the auction house markets your property for 6 to 8 weeks.
They often feature it in their brochure and website, for example. This gives interested parties time to arrange a survey on your property.
Auction day
Bidding
Your auction house will specify the exact date of your property’s auction day. People who are interested in your property will bid on the day.
Exchange of contracts
Once someone wins the bid, the contact exchange occurs on the spot. They’ll also have to pay a 10% deposit (of the total sale price) immediately.
They then have 28 days to pay the remainder of the sum.
Do I need ID to go inside an auction house?
Yes, in most cases. Whether you are bidding or selling at the auction, ID will be needed.
You’ll also need proof of residency. This is largely to ensure all transactions are legitimate.
Information about the source of funds could also be needed to meet HMRC Anti-Money Laundering Regulations.
How long does it take to sell a property at auction?
As mentioned above, it takes around 12 weeks from the moment you first contact an auction house to the day you hand over keys to the property.
This timeframe can vary depending on the circumstances.
Auction day itself lasts between 1 to 6 hours from start to finish. And most bidding processes last for a maximum of 15 minutes.
Do I have to be at the auction house on bidding day to make an offer?
Not necessarily. Most auction houses offer other ways that you can bid on a property.
Telephone bidding allows you to make an offer without being there in-person. This is done via a member of staff at the auction house.
You can make a proxy bid, which means that a member of staff at the auction house bids for you on the day.
You can also bid via the internet. This involves a secure link through which you can type your offers as the auction progresses.
What happens if no one bids on a property at auction?
The property is withdrawn if no one makes a bid. It is then up to the property owner what to do with it.
At this point, you are under zero obligation to sell. You should confirm this with the auction house, as some organisations handle this situation differently.
Do I have to pay up on auction day if I buy a property?
You typically must pay 10% of the selling price on auction day. You then have 28 days to pay the remainder of the amount due.
This is the case for most auction houses. However, you should check the organisation’s terms and conditions, as sometimes they can vary.
Speak to a qualified expert if you need personalised guidance on any of these matters.
