I often get asked how to sell your property at auction.
I don’t deal with auctions a lot, but I am aware how they work and generally I can give advice on what to do. Now it depends how motivated you are. How quickly you’re looking to sell.
When you are selling at auction, the people that are buying at that level expect it to be cheaper than what they would pay on on the market via an estate agent. So if you’re selling at auction, be prepared to lower the value. That’s the first thing.
How much you lower it by is up to you.
In the North East here, there’s three or four auction houses and they can charge quite a lot of fees.
Be careful if you say, “Well, I can sell the property for £50,000” but its in fact worth £70,000. As some auction houses may charge the a very large buyer’s premium, typically £6,000 plus VAT. This is in addition to charging you £5000 plus VAT.
Be careful not too ask for too much.
Oftentimes, if you go in at near market price or just below, the auction houses will charge you a fee because they’ve got to do a lot of marketing which has costs involved. And if they think that there’s not much chance of the property being sold at such a price, then they’ll charge you a fee.
It’s only when you apply a discount that they’s reasons that the chances of selling your property through the auction will be highly probable. In this case they’re likely to waive the fee.
Estate Agents love when you use an auction
Remember, there’s a lot of estate agents out there who have partnerships with auction houses.
So if they’re charging you £5,000 plus the VAT, in many cases half of that money will going to the estate agent. So estate agents are actually making more out of an auction sale than what it will be in a traditional sale. So beware of that because your estate agent might be persuading you to go down that route, but there’s got a method in their madness. So be careful.
The beauty of selling your property at auction is that you would have had all your contracts done and it’s listed with prepared contracts, so buyers can complete due diligence prior to buying. As soon as the hammer comes down, they have to pay a 10% deposit and then that carries onto the legal process. So it does give a new certainty in that way. But saying this there is a quicker way. We can sometimes sell in as little as 7 days.
So if you’ve got any questions on that subject, give me a call at 0191 486 2386 any time.