A guide to selling your property by auction
Many clients are now selling their properties very successfully at Auction, call any Robert and Oulsnam and Company office and they will gladly give you all the details you need to sell a property at Auction.
It is very important that pricing is realistic and it is ideally suited to anyone who wants to sell relatively quickly or within a set time frame, remembering that normal private treaty sales often take about six months to complete from the moment the property goes on the market. This timeframe can cause problems for vendors and buyers alike, an auction not only offers a relatively quick sale but also an incredibly secure one. This allows all parties to plan ahead with confidence trusting that the sale or purchase will proceed to exchange of contracts.
There are two principal methods to sell by auction
The Traditional Method Of Auction
This is a tried and tested method but with some limitations due to more restrictive timeframes to exchange contracts and complete the sale. Sales normally take place in a public auction room but can be private or on line. The key point is when the hammer falls this is deemed to be exchange of contract and the buyer is immediately committed to pay a 10% deposit and complete in about four weeks. They would be expected to have their finance in place and any survey done. This limits buyers and the interest and activity around residential properties. It is however well suited to properties in need of repair or where absolute certainty of sale is the key. In normal circumstances the seller will pay for all the costs of taking the property to auction.
The Modern Method Of Auction
This more accessible route creates a transparent platform for buyers and sellers combining the best aspects of traditional auction and private treaty sales. We offer more realistic yet fixed timescales, opening up the marketplace for buyers and sellers looking to arrange mortgages as their method of payment. The transaction has 56 days in which to complete with parties aiming to exchange contracts within 28 days of the Draft Contract being received by the buyer's solicitors. Whereas with traditional auctions, the exchange of contracts will usually take place as soon as the buyer has won the bid.
The Modern Method of Auction opens the auction market (once reserved for the professional investor or cash-ready buyer) up to residential buyers, creating a larger marketplace and more interest and activity than traditional auction. It is the preferred route for buying and selling via auction and has changed the perception of auction in the last decade. In normal circumstances the buyer pays a fixed fee that will cover the cost of selling at auction
The Benefits of Selling at Auction
Achieve Fair Market Value. Think about how an owner of a piece of fine art maximises its value? They sell it at auction! Due to the increased marketing and unique pricing strategy that we operate, we guarantee to get you the fairest price in the current market. A property will always sell for what it’s worth, plus you have a reserve price so you know it won’t sell for anything less than the one you are happy with. A Fixed Date to Sell & Move Fixed time scales for exchange & completion provide clarity for both parties. A fixed time scale is not often set when selling a property through private treaty with sales taking much longer than anticipated. This added security is a big benefit to most vendors looking to move forward with confidence.
What to next
1) Choose your sales method, Traditional Auction or the Modern Method
2) Choose your Preferred Payment Method Vendor Paid.
You can opt to pay the sales fee instead of the fee being charged to the buyer. If you decide to do this we will take a non-refundable Deposit from the buyer to secure the sale. Reservation Fee Under this payment method, the buyer will pay a non-refundable Reservation Fee in addition to the purchase price. This covers the costs of the auction and as this is paid on a non-refundable basis, you know the buyer is serious and in a proceedable position.
3). The Auction & Sale Progression.
Once you have selected your auction and payment type, you will be assigned a personal Auction Coordinator who will keep you updated with viewing feedback and bids. Your Auction Coordinator will become your point of contact; they will provide weekly activity updates and guide you through the process. Upon successful conclusion of the auction, our expert Sales Progression team will manage the sale through to completion
If you decide to sell your property via auction, you will need an Auction Pack for your property. These packs contain important information about your property that a potential purchaser needs when deciding whether to bid. These packs include the following things:
|Local Authority Search||Property Information Questionnaire|
|Water & Drainage Search||Reservation Form or Contract|
|Title Plan Register or Epitome of Title||General Terms & Conditions|
|Fixture & Fittings Form||Any Special Conditions of Sale|
Our legal partners Medway Law can provide a pack for you. If you choose to instruct us on the sale of your property we will discuss all the options and costs with you. For further information you can visit www.medway-law.co.uk. Should the wish to provide your own Auction Pack we will need a copy before we are able to successfully sell your property
Frequently Asked Questions
Is my property going to sell? There are two components needed to maximise the chances of selling through auction; a motivated and realistic seller, and secondly, great marketing exposure. Our marketing strategy will guarantee you the fairest price in the current market for your property. If you decide to explore the auction route further, a member of our Auction Department will discuss the most effective pricing strategy to maximise interest on your property.
Do I have to accept the highest bid? No, all properties are sold with an undisclosed minimum reserve price (agreed with the seller). The only price the public sees is the starting and actual bids; the reserve price remains confidential. Once the reserve price has been met and the auction is closed the sale will proceed. A Reservation Fee/Deposit is then taken. If you choose to pay no sales fees, the Reservation Fee will not form part payment of the purchase price but will be paid in addition to cover the costs of the process.
Can I accept bids outside the auction process? Yes. You can accept a bid to sell the property before the auction has finished. By law we are duty bound to put any offer forward to you. It will then be up to you to decide if you want to consider the offer and take the property out of the auction early.
How quickly will I have to move out? Depending on which auction option you select this can be decided by you but will generally be between 28 – 56 days.
If the prospective buyer does not agree to pay the fee, will I lose my offer? The law requires that any offer made to purchase your property must be passed on by the agent unless you have said that offers of a particular type are not to be advised to you. If the prospective buyer does not agree to pay the fee, the agent should advise you accordingly and seek your instructions.
If the actual buyer then refuses to pay, will I have to meet the agent’s fee? This will depend on the specifics of your individual contract(s) with the agent. The agent should explain this clearly to you before you sign anything. The actual buyer has entered into an agreement to pay the fee so it is for the agent to pursue the buyer, but the agent must make clear to you what will happen in such circumstances.