HOW TO SELL A PROPERTY ON AUCTION

As the auctioneer’s hammer slams down on the final bid, another successful sale is concluded – with more and more people choosing auctions as a rewarding and effective means of selling their homes.  Auctions generally attract very motivated and competitive buyers and because there isn’t a cap price on the property, it provides an opportunity for sellers to achieve the maximum price. 

A further advantage is that the seller can set a minimum price at which he or she is prepared to sell the house at (the reserve price).   Confidentiality is important and the reserve price should be kept between the seller and the agent, with advertising material only referring to a general indication of the price bracket.  When a property is sold on auction, it generally means that contracts are unconditional and there is no cooling off period for buyers. 

However, there are always two sides to a story, and if you’re considering selling on auction, have a look at the whole story before committing.  For example, buyers who have a conditional offer may be unable to participate.   Some buyers may also be put off by the urgency and competitive environment of the auction.

Before making a choice of estate agent to handle the auction, check out their track record in auctions and also their professional and industry qualifications.  It’s also wise to go to some actual auctions and see how the various agents handle the process before you choose one.  Some people are naturally gifted in the negotiation process, and making the right choice could make a big difference to the outcome.  It’s wise to go through the mechanics of the auction process yourself, and understand all the local regulations and requirements so that there are no regrets or nasty surprises at the end.

An auction agent is the same as an estate agent for your home – so choose them just as carefully as you would if you were selling your home in the regular way.  Check their track record, ask for actual data from past auctions, establish commission rates, find out how they intend marketing and advertising your property and ask for client testimonials if required. 

Your conveyancer or solicitor will prepare contracts for signature prior to the auction, the property will be marketed and home inspections held for prospective buyers to inspect the property.   As you would with any contract, check the fine print and ensure you are happy with all the terms and conditions.

Sometimes, buyers who have seen the property during the marketing phase may be interested in putting in a bid prior to auction.  The agent would then invite all of the potential buyers on their database to see if they wanted to submit a bid themselves.  Should the seller wish to proceed to sale, then contracts are exchanged and the auction cancelled.

Some snippets about property auctions from a Bentley property specialist :

§  An auction can be a quick sale route for repossessed properties, ones that are tricky to move through conventional channels due to poor repair, unique nature etc

§  They create an atmosphere of high demand

§  The sales process is usually faster than conventional channels

§  Contracts are signed on auction day, and completion of the sale is usually done within only 28 days

§  Prospective buyers are pre-qualified

According to professionals in auctions, Bentley real estate agents say that auctions can be very rewarding for people wishing to sell their homes.  However, they do urge sellers to familiarise themselves with the auction process, understand all the costs involved and all the legal and technical requirements and be prepared for every outcome before they make any final decision on the sale of their property.