Deciding to sell a property at auction

Deciding whether to sell by public auction or private treaty is ultimately about what is suitable for the seller. An auction provides a higher degree of certainty which can be very appealing, especially if time is a factor in the sale. Once the gavel falls, a legal and binding contract is made with completion usually within 4-6 weeks.

If the benefits of selling at auction are appealing, you first need to decide on an auctioneer based on factors such as the auctioneer's expertise and location, the costs and how the property will be marketed in the run-up to auction.

Sale costs usually depend on lot size and location and are typically split between a catalogue entry fee and a sale commission based on a percentage of the sale price.

To market the selection of available properties and the auction, most auctioneers still produce a printed catalogue that is widely distributed and advertised in the press. In addition, email, online advertising and social media are widely used. As with a private treaty sale, viewings will also be arranged in the run-up to the auction.

How do we decide on the guide and reserve price?

The reserve is the agreed minimum price a seller will accept for the property. It is kept confidential between the seller and auctioneer.

Although definitions may vary between auctioneers, the guide price should generally reflect the reserve and what the property might be sold for. It is essential to keep an eye on the auctioneer's website for any updates as new information comes in, and sometimes the reserve and guide can change before the sale.

Whose responsibility is the survey?

Consumer protection legislation means that sellers should now disclose details they are aware of that may materially affect the value of a property before a sale. However, it is still important that buyers undertake their due diligence in reading all available documentation and satisfying themselves as to the property's condition. The best way to find out about the state of a property is to arrange for an inspection. If a surveyor or a builder accompany needs, always allow a contingency for unforeseen costs.

At what point is the property sold?

Although a property may be put up for auction, some sellers may be tempted to sell before a sale. Equally, if a property fails to sell on the day of the auction there is every chance it can be sold post-auction at which stage the auctioneer is at liberty to disclose the reserve. 

However, assuming that the property goes to the auction, all someone has to do to buy a property is keep bidding. If all goes well, bidding reaches or hopefully exceeds the reserve, and the fall of the gavel will be the signal that you have sold your property.

So, what next?

The auctioneer will ask the successful buyer to produce ID, sign a memorandum of sale and pay a deposit, usually 10% of the sale price. It is also usually required for the buyer to insure the property, which needs to be arranged straight away. All that remains for the buyer is to find the balance of the purchase price ready for completion.

Selling at auction can be simple for both the seller and buyer, but doing the groundwork beforehand will ensure that both parties are happy with the sale. If you have any questions, please don't hesitate to contact a member of our auctions team.