1st August 2023
How a property auction can help you to sell your retirement property
A niche area of the property market, retirement properties saw an influx of sales in the recent past, and the resulting bottleneck inspired many sellers to take to the auction room. Join us as we explain the reasons for the surge, and why buying and selling retirement flats at auction became so popular.
Soon after the pandemic, auctioneers and real estate agents alike experienced a higher than usual volume of enquiries from those selling retirement properties. We noticed this at SDL Property Auctions, where we had a high number of calls from people asking us to value a retirement apartment, which is unusual for such a niche market. While there are other reasons that could be attributed to the increase, the rise in enquiries appeared to be another unfortunate result of the coronavirus pandemic. Despite the start of this being a few years ago, the backlog of retirement properties caused a wide-spread freeze which has only thawed recently.
Although the demand has since eased, it doesn’t solve the issue that retirement flats are oftentimes harder to sell than conventional properties. With a limited market and long waits, we’ll discuss the difficulties those selling a retirement property may encounter along the way. We’ll also highlight how some of this stress can be alleviated through selling the property by auction.
What age do you need to be to purchase a retirement property?
Though exact numbers can vary, retirement properties are generally for people aged 55 and over. It is, however, common for properties to be occupied by those much older than this, as these dwellings tend to be based within purpose-built developments that have communal areas, gardens and various other facilities and amenities which are well suited to elderly residents.
While this is designed to offer freedom and independence, many older residents need to leave their property for alternative accommodations that offer more support. This, combined with the overall number of older people increasing, has meant that the turnover and demand for retirement properties is constantly evolving.
Why is it hard to sell a retirement property?
There are three main elements which make selling a retirement property more difficult than a typical house or apartment sale. These are the limited buyer range, the service charges, and the exit fee, each of which we’ve detailed below.
- Limited buyer range
Compared to a conventional property that anyone can buy, it can be harder to sell a retirement property due to there being a significantly slimmer range of potential buyers able to make the purchase. While this is less limiting than it has been in previous years, due to the number of people aged 55 or older increasing, it still results in less buyer interest than you could expect for a house suited to a first time buyer or growing family.
- Service charges
If you’re selling a retirement property, you’ll also need to pay the service charges of the flat until someone buys this from you. With this property type, the service charges go towards the maintenance and use of the facilities, meaning those living there might be paying a higher price compared to a conventional flat. As a result, if you’re a buyer, we recommend enquiring about how much these costs will be before you purchase the flat to avoid any nasty surprises later down the road.
- Exit fees
Finally, another additional expense that we recommend considering is the ‘exit fees’ paid by investors once the property is sold, which is usually outlined in the rental lease.
Can you auction a retirement flat?
Yes, deciding to auction a retirement flat is a great alternative route compared to selling on the open market. At SDL Property Auctions, we’re well-versed in selling a wide range of lots at our auctions, including retirement properties. While these can be challenging to sell, some of the stress that sellers encounter through the open market can be alleviated by selling via auction.
While we understand that private buyers don’t always consider this route, we have noticed an increasing number showing an interest in selling properties this way due to the difficulties they have had selling on the open market, either from sales falling through or buyers showing little to no interest in their property. Therefore, it seems that more people are realising that auctions are not simply a last resort, but can in fact be a much quicker way of selling a retirement property.
The benefits of auctioning a retirement property
People might need to drop the asking price of a retirement property on the open market where sellers may be more hesitant to show interest, while the more unique buyer-range you get at auctions are more likely to respond well to a unique property. In fact, there are a range of benefits of auctioning a retirement property that we’ve listed below.
- Faster sale – Securing a speedy sale is a priority of many sellers, regardless of the type of property they’re listing. This is because it allows them to cut down on unavoidable costs of owning a property, such as council tax and utilities bills. For a retirement property, there are also the service fee payments to consider, so the typically-faster auction route is particularly attractive.
- Limited completion period – Although this requires a high level of commitment from buyers, the limited pre-agreed sale period of auctions means that any sale will be completed in 30-60 days (depending on whether you choose to sell by a conditional or unconditional auction), taking the continuous monthly bills and service charges off your plate within a guaranteed time frame. Not only this, but the risk of the sale falling through will also be reduced due to the non-refundable deposit and penalties in place.
- Wider buyer-market – Following on from the previous point, auctions naturally attract investors, such as those looking to invest in a retirement property, whether this is to renovate and sell on, or to use as a buy-to-let opportunity. Hence, this opens up the property to another potential buyer group instead of traditional buyers.
- Streamlined process – If you don’t live close to the property and are attempting to reach an agreement with siblings or other family members before the property can be sold, at SDL Property Auctions, we’re well-equipped in dealing with this. For instance, relatives who cannot agree on a value can easily have their disagreements resolved by letting bidders decide how much the property is worth, safe in the knowledge there’s a reserve price set for security and peace of mind. So, while we can’t take away loss or grief, we can prevent unnecessary stress by helping you to secure a fast and transparent sale.
Buy or sell retirement properties at SDL Property Auctions
If you’re looking to sell a retirement property, you can find out more about selling by auction through requesting a free, no-obligation free sales valuation, where we will aim to get back in touch within 24 hours. Alternatively, you can take a look at the properties available in our upcoming property auctions, where you can view the lots, register to bid, or sell your property.