Buying and selling property at auction

If you’re looking for an alternative to buying or selling through an estate agent, an auction house could be the place for you. Some of the risk and red tape associated with property can be avoided by going down the auction route. In this article we cover the key advantages of homes under the hammer.

Auction House Logo

"Auction House" hold auctions in 30 locations nationwide and help property sellers and buyers work around some of the head aches associated with the property market. Here are their top reasons for going down the auction route

Selling at auction

Speed

Selling at auction can take as little as four weeks. This is from when you first instruct your chosen auction house through to when you exchange contracts. Going through an estate agent can take considerably longer. Find out the average selling time in your area using this handy house market reporting tool. Timescales are set and legally binding meaning that you can plan ahead far more easily if you need to relocate or dispose of a property within a certain time frame.

Chance of Success

The likelihood of selling your property is high if you take the auction route. Auction house reports that it sells around 80% of the lots offered.

Legal and Binding

Buying at auction is a far more concrete deal from the off. Once the auctioneer says "sold", the buyer is committed and is legally obliged to honour the deal.

Competitive Bidding

In the auction room, it is likely that two prospective buyers will bid against one another for the property. This will often help achieve a better price for your property depending of course how badly the buyers want your property! On occasion, some buys will be so keen to purchase a property that they will put in a pre-auction offer. If the auction house feels that this price is unlikely to be matched or surpassed, they will recommend that you accept this offer with the condition that contracts are exchanged before auction day.

Best Price

Often the final selling price at auction is higher than what might be acceptable when selling via an estate agent. If you've inherited a property, selling at auction could be especially beneficial as executors of a will have a duty to achieve "best price". When selling by auction, this is a guarantee. As an auction is such a public forum, executors will have all the evidence needed to prove their actions were legal.

Continuing Tenancy Income

You can even sell your investment property at auction. The advantage here is that you can keep your tenants on and receive rent right up until completion. After this time, the purchaser will start receiving income from the rent. This is often an attractive proposition for those looking to buy a property to rent as they do not have to find tenants themselves. The types of rental property sold will depend on the auction house in question however, types of property may include; regulated tenancies, houses in multiple Occupation, assured shortholds and other that are let commercially.

Buying at auction

Chances of a Bargain

Just as you might grab a bargain at an antique auction, the same is true of property auctions. There may be a few lots which will be of no interest but hang tight and you could come away with a bargain which is just what you've been looking for. And there won't be a David Dickinson in sight!

Certainty of Success

Once the hammer comes down, that's it - it's yours! When buying a house through an agent there is invariably an anxious time where by another buyer might put a higher offer in or the seller may even change his or her mind for reasons unbeknownst to any one! With auctions, this will not be the case. Once the lot has been sold it's all over and the deal is legally binding.

Speed

Buying at auction can give you peace of mind. As we've previously mentioned, once the lot has been sold, there's no negotiation and no chance of being beaten to the punch by a higher offer. There's also a 28 day guarantee on completing the sale so you can plan ahead without the worry that something might change at the last minute.

Opportunities

Don't shy away from a good project. Similarly, don't ignore a property on the auction list just because it looks a bit run down. Many of the properties listed at auction are excellent investment opportunities and can be done up to turn out a profit at resale. Be sure to check the lot thoroughly before bidding to establish what you can and can't do with it but auctions do offer up a great opportunity to develop.

No Hidden Surprises

Many auction houses will work with solicitors and sellers to compile as much information about each property. This means that even before the first bid goes in you'll have all the information you need about the property. This may include; searches, title, leases on tenanted property, relevant planning permissions and scheme layouts for development plans.

Level Playing Field

The nature of an auction is such that everyone has a fair chance at purchasing a property up for auction. You can put in a pre-auction bid however, for this to be accepted, the offer has to be substantial enough that the auction house does not foresee a higher price being bid in the auction room.

Immediate Tenancy Income

If the property on offer is a rental property and is already occupied by tenants, you could start earning income from the rent as soon as the 28 day period is over and the sale is completed. If you were buying the property for the purpose of renting it out you will have saved yourself some time finding new tenants.