There are more ways than ever to sell your home than ever before. From privately selling your home yourself or via an estate agent, to putting it up for sale via auction being the main options, it’s hard to know which one is right for you and your circumstances. This guide will help you understand the difference between selling a house at auction vs a private sale, in order to find out about the best strategy to sell your home.
Table of Contents:
- What is the difference between selling a house at auction vs a private sale?
- The pros and cons of selling a house at auction vs. a private sale
The main difference between selling a house at auction and selling privately, via an estate agent or yourself, is that an auction has a fixed timescale for exchange and completion.
At an auction, an exchange will typically happen once the hammer has fallen on the auction date, and the sale will complete around 28 days later. On the other hand, a private sale may see a sale agreed quicker, however there is no fixed timescale or completion date. In some instances, the time in between the sale agreed to completion can take six months on average.
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Another difference between selling a house at auction and a private sale is the way in which auctioneers and estate agents approach valuing your property. If you choose to opt down the estate agent route, they will often suggest asking a higher asking price in order to negotiate a lower, more realistic price with potential buyers. After the house as been on the market for a certain period of time, an estate agent may advise you to lower your property’s asking price, until interest begins to peak.
On the other hand, an auctioneer will guide a property at a more attractive price to buyers, to generate interest from multiple buyers. This way people will essentially “fight” to out-bid one another and drive the price up. Often, the final price after the hammer has dropped will be similar to – or exceed – those achieved via estate agents.
But more often than not, the decision to sell a house via auction is determined by the seller’s circumstances. Auctioning a property is fast and you are highly likely to have a quick sale, with the exchange of contracts within three to six weeks, with completion happening four weeks later. So, why might a homeowner choose to sell a house at auction, vs a private sale?
A seller may choose to follow the auction route if they are:
- Downsizing to a smaller home
- Purchasing another property and moving to a new home imminently
- Needing cash quickly (such as to get out of debt)
- Wanting to sell off an estate, possibly including contents
- Wanting to release equity in their home (over 55s only)
- Not interested in negotiations or other direct involvement
- Not an expert in property matters
- Distrusting of a traditional estate agent
If you need a quick sale, it is also worth considering going through a “we buy any house” scheme, where a company (such as Fast Sale Homes) buys your property in any condition, in return for a cash offer.
However, if you are not desperate for a quick sale, it may be worth privately selling your home to allow time to look around for a property of your own on the market in your own time. Read on to find out the pros and cons of selling your home at auction vs a private sale.
Selling at auction
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- Quick sale – everything is often completed in 30 days or fewer
- Allows for chain-free selling
- Highly competitive bidding process
- The seller is in control – they set the terms, day of auction etc.
- Easier to sell renovation projects
- The sale isn’t subject to change due to inspections and surveys, like a private sale
- Buyers can’t ask you to any additional work or pay additional expenses – the property goes for what is agreed in the auction house
- Experienced professionals are in charge of the marketing, promotion and paperwork
- No guarantee of sale – depends who is in the auction house on the day
- Uncertain sale price – you can set a reserve, but you can never be sure how much over the reserve price your property will go for
- You must pay fees
- As it’s a quick turnaround, you will need to move out quickly
- All sales are final – so you must continue even if you’re not happy
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- You can avoid paying some commission fees – most people save approximately 2% of the value of your home
- You know your property better than anyone
- Everything is on your terms – as you are in charge if visiting times
- You can market your own property – you are not competing with an agent’s attention to put your property forward first to buyers
- You must navigate the selling process without assistance
- You may be unaware of any legal requirements needed before marketing your property, such as a Home Information Pack and Energy Performance Certificate
- It may be hard to market your property to reach potential buyers, like estate agents can
- Communicating with buyers can be difficult – it’s hard to set aside emotions and buyers will constantly let you down
- Showing potential buyers around your property can be tough – you must be enthusiastic and take feedback on the chin. (If this doesn’t sound like you, you may struggle to sell)
Which route do you prefer?