Many homeowners may decide to go down the route of selling a house at auction for a number of reasons, such as looking for a quick sale or hoping to enter a bidding war to boost the value of their house. Either way, you may want to find out more about the process of selling your house at auction. We have put together this guide to selling a property at auction, to help you understand the process and what to expect before your property goes under the hammer.
Table of contents:
- The auction process in 6 steps
- How long does it take for the sale to go through?
- How much does it cost to sell a property at auction?
- Pros and cons of selling a house by auction
The auction process in 6 steps:
You may be wondering, what is the home auction process? Well, there are six main steps to selling a house at auction. They are as follows:
- Consultation
The first step is an assessment of your property by the auction house. They will tell you whether your property is suitable to sell at auction, and how much it is worth. It is a good idea to find out the value of your home before auctioning your home, so you know what to set your reserve price at.
- Entry fee and commission discussion
After your meeting with the auctioneer, you will find out the fees and commission. Even if your property does not sell at auction you must still pay these costs, so be aware of the costs and whether you can afford it.
- Property inspection
Surveyors will be sent to examine your home to be placed in the auction booklet and/or online. They will take photographs and measurements.
- Promotion
The photographs and measurements taken in step 3 may be used to market your property. Auctioneers often promote your property through the press, online and their own auction brochures. Auctioneers will report the interest on your home back to you.
- Auction
After the marketing of your home, hopefully there will be a lively presence at the auction house. Any bids on your property can be made in person, online or even via telephone.
- Sale completion
Once the hammer falls, the buyer must pay a 10% deposit there and then. This is a legal obligation required to complete the purchase of your home.
Photo credit: Willy Barton / Shutterstock
How long does it take for the sale to go through?
In general, the length of time it takes to sell a house at auction can vary – in some cases it may be as quick as 2 months.
It is advisable to put your property up for auction at least 6 weeks in advance, and once the hammer falls, sale completion should take 28 days. This is because someone buying a house by auction must commit to paying a 10% deposit upfront, with just one month to pay the remaining amount.
How much does it cost to sell a property at auction?
Before you go ahead with selling a house at auction, it is important to look into the costs involved. Although there are no hidden auction fees, the cost of selling via auction can really mount up; before long you could be financially unable to go on with the process.
The fees themselves vary, and often you will need to pay an entry fee and commission. Entry fees depend on the auction house, and commission fees are a percentage of your sale price – typically 2.5%. For example, if you decide to sell your home for the value of £250,000, you should expect to pay the auctioneer £6,250.
You must also pay legal fees and hire a solicitor to put together a legal pack, which depends on the solicitor you decide to hire. This tends to be anywhere between £350 and £500.
RELATED POST: How much does it cost to sell a house at auction?
Pros and cons of selling a house by auction
When it comes to selling a property at auction, there are a number of things you must consider before going ahead. What are the pros and cons of auctions? Is it really worth it?
Advantages:
- Chain-free property sale
- Bidders may get into a bidding war and increase the value of your property
- All properties must reach a reserve price before being sold – this is set before auction day
Disadvantages:
- The cost of selling at auction may actually exceed estate agent fees
- If you don’t reach your reserve price, you must still pay for the auction expenses
- The sale price will not match the true value of your property – bidders tend to want a bargain
- The sale isn’t always fast – it can take up to 3 months to complete
Feature image credit: Freedomz / Shutterstock
