An auction house environment can be an exciting environment and has the potential to be rewarding for those that know how the system works and when to raise their hand, but if you are new to the process, it can seem quite daunting and even a bit confusing.
If you have every asked the question and wondered whether I should consider selling my house at auction? Here is a look at some of the points and rules of the game that you should know about.
Auctions Are For Everyone
The most salient point to make about buying and selling property at auction, is that auctions are no longer the exclusive domain of ruthless property developers and wealthy investors with financial muscle.
These days, many people who are looking for a quick route to selling their home, can choose to list their property at an auction and know that there will often be healthy competition for your house when it comes under the hammer, and the price is often at least equal to the amount you would expect from a private sale.
You will find that a growing number of buyers, sellers and property investors are using auctions because they provide a well-controlled and opaque selling environment in which to buy and sell property in.
The first aspect to consider is the suitability of your property for an auction.
It used to be that more unusual properties or renovation projects were listed at auction in order to attract cash buyers and developers, but many conventional properties are also sold through auction these days.
You will still find properties listed that need refurbishment, have been repossessed, or have been on the market for some while, but you are just as likely to see a property that attracts a lot of interest and therefore achieves at least the market value or beyond it, if there are bidders competing against each other.
Arranging The Sale
Contact your chosen auction house and arrange for them to carry out an appraisal of your property.
This will enable the auctioneers to advise if your property is suitable for listing at auction and discuss your expected sale price and reserve price, to see whether both parties agree that the figures are realistic and viable.
The reserve price is the minimum amount you are prepared to sell your property for. If this figure is not reached or exceeded at the actual auction itself, the property will be marked as unsold at the auction.
Setting a realistic reserve price gives you the chance to get a sale on the day of the auction but prevents you from seeing your house sold for a figure below what you want or need to get for it.
As with any sales process, marketing plays a key role in getting your house sold at auction.
The auction house will create an auction catalogue which contains details and pictures of all of the properties that are being auctioned on the chosen day and they will send this out to interested parties before the event.
They will also market the event itself so that hopefully, attendance will be high for the auction event. A successful auction hinges on there being a sufficient number of buyers in the room to create competition and be able to sell as many properties as possible.
The auction house will inspect your property in the same way that an estate agent would come and do a valuation visit and use these details and images taken, to create a profile of your property in the catalogue.
Day Of The Auction
You should be ready and able to vacate your property shortly after the auction, if a sale is achieved.
The auctioneer running the event has a gavel in his hand and as soon as bidding for your property has reached a conclusion and the sale price has equalled or moved beyond the agreed reserve price, he brings down the hammer or gavel, to signify that bidding has finished and your property has been sold.
You need to be aware that at this point, you have entered into a legally binding contract and there is no opportunity to change your mind or withdraw from the transaction.
The purchaser will be required to provide the auctioneer with identification and a deposit equal to 10% of the purchase price agreed. Completion of the sale of your property will then take place about 20 working days after the auction date, when the remaining balance is paid.
Selling your home at auction can provide a level of certainty that a private sale cannot, until you exchange contracts. This makes it an attractive way of potentially getting the price you want as well as being able to sell in a specific amount of time as well.
Jordan Gilman is a landlord and property owner. She likes to keep on top of the latest real estate news. Her articles appear on many real estate websites.