A Guide to Auction
Auction is becoming an increasingly popular way of selling and if this is something you are considering please phone your local Robert Oulsnam and Company Office and they will be very happy to answer any questions you have.
You will need to agree a reserve price below which the property will not be sold, we would recommend this is kept at a realistic level to attract interest. You will also be entering a fixed timescale although this is agreed by you, once the hammer falls completion will occur at a set point in the future.
There are two principal methods to sell by auction:
The Traditional Method Of Auction
This is not open to all buyers as they have to be in a position to exchange contracts immediately the auction finishes. Sales normally take place in a public auction room but can be private or on line. The person arranging the auction (The Auctioneer) will invite bids off the people present, he will constantly indicate the person who has made the highest bid and encouraging others to bid, once everyone has stopped bidding the Auctioneers hammer will fall and he will point to the highest bidder who is the buyer. 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. Most buyers involved in a chain cannot consider this method but it is well suited to those buyers with sufficient funds. It is 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. In the Modern Method the property is offered for sale online or in the room and once the hammer falls the buyer pays a substantial none refundable deposit. The transaction then 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 although this time scale can be extended by agreement. If ultimately the buyer fails to complete in the agreed time scale they lose their substantial deposit.
The Modern Method of Auction opens the auction market up to residential buyers, creating a larger marketplace and more interest and activity than traditional auction. The buyer has plenty of time to arrange mortgages and surveys and get their chain complete. It is the preferred route for buying and selling via auction and has changed the perception of auction in the last decade. The buyer pays a substantial deposit that will cover the cost of selling at auction and the seller may not have to pay anything.
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 provides 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.
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