12th July 2024

How to sell your property by auction

Whether you’re looking for a quick, transparent sale or guaranteed, genuine buyers, there are many reasons why you might want to sell your property by auction. Auctions aren’t only for investors and property developers, they’re a great way to sell faster and for a potentially higher price, with the opportunity for bidding wars to drive demand and the security of knowing that your property will never be sold for less than the reserve price.

If you’ve already chosen to sell by auction, or just want to understand the process before deciding whether it’s right for you, then you’ll need to get to grips with some key details. In this blog, we guide you through an easy step-by-step process of what you can expect when selling your property by auction, as well as any costs that you might incur and all the options available to you.

Why sell your property by auction?

There are many benefits to selling by auction. Not only is it a fast, straightforward and transparent process, but the sale becomes legally binding quicker, and offers more security than an open market to give you peace of mind. Properties that are sold by auction achieve on average around 85% – 90% of their market value, however, this can be far surpassed on the day, and the process is much faster and easier, making it appealing to sellers and buyers alike.

There is usually a diverse range of buyers at auctions, meaning there are more opportunities to find the perfect buyer for your house. Buyers who go to auctions are typically serious about buying property, and they may be cash-in-hand investors or open-minded property developers which can be beneficial depending on your circumstances.

There is also the opportunity to get a higher price for your property if it’s been well-marketed and attracts multiple interested buyers, as this may start a bidding war which will see the price increase. The best part is that an auctioneer such as ourselves will take care of all the marketing for you, ensuring your property is well promoted across our website, auction catalogues, newsletters, social media and more.

How much does it cost to sell your property by auction?

Before starting the auction process, you’ll need to know about any fees involved. There are several options when it comes to the fees involved with selling by auction. This can include the seller paying no fees at all and instead these are passed on to the buyer as part of the overall purchase price. This is something that buyers will expect, however, it’s important to know that they will factor this into their overall budget, which may see the pool of potential buyers lowered.

Alternatively, the seller can pay the initial fees and commission price, meaning the buyer doesn’t have to pay anything extra, maximising the final sale of the property. Fees can change depending on the auction method. Here at SDL Property Auctions, our auctioneers will provide tailored advice to help ensure you’re happy both with the method of sale, and the fees included, before adding their property to our catalogues.

Whichever route you decide to take, there will additionally be solicitor fees to pay. A solicitor is required to prepare the legal pack for your property, which typically costs around £350 to £500.

Get an appraisal

Before you can list your property for auction, you’ll need to get an appraisal. An appraisal is a consultation process where the auctioneer will advise whether your property is suitable for auction and provide you with an accurate valuation. Here at SDL Property Auctions, we have a free sales valuation service where we take into consideration the condition of the property, location, local sold prices and market conditions to provide an accurate valuation of your home.

Knowing your property’s worth will help you select an appropriate guide and reserve price, and we’ll provide more detail about this later in this blog.

Appoint a solicitor

As mentioned, you’ll need a solicitor to handle the legal paperwork required for selling by auction. A lot of the legalities are completed upfront before the sale, and they will gather everything you need and put it into a legal pack that will be available for potential buyers to look at. They will also help you draft the contract so it’s ready for the buyer to sign as soon as your property is sold.

Set a reserve price and guide price

Next, you will need to fix both a guide price and a reserve price. The reserve price is the lowest that you’re willing to accept for your property and is not publicly disclosed, this ensures that you won’t get a penny lower than what you’re happy to receive for the sale. The auctioneer will not sway you to lower this, but they will provide guidance as it is important to note that your property may not sell if you set the reserve price too high. If the bids do not reach your reserve price, then your property will not be sold. At SDL Property Auctions, if your property does not sell, either on the day of the auction event or by the auction end date if you opt for a timed auction, then we will continue to market it as an unsold lot, so that you’re still able to attract potential buyers at a later date.

The guide price is the price at which your property is marketed to potential bidders. Again, this is something that your auctioneer will help you with to ensure it’s a fair price and will generate the best results. The guide price must be within 10% of your agreed reserve price. It’s worth noting that an attractive price that will appeal to many buyers may encourage more competitive bidding, which can lead to the property achieving greater than the guide price. This means it can be a strategic move to set this lower than you may think, but be sure to follow the auctioneer’s advice on potential demand.

Market your property

When selling by auction, you’ll get the added bonus of extensive marketing on your property with the help of the auctioneers. This will include a description of your property, as well as professional photographs and potential social media and local press marketing as well.

Once you’ve signed off your property details, it will be added to the auctioneer’s website and catalogue. It will also be advertised on property portals for potential buyers to browse. If you are going through an estate agent then you will want to make sure that they are marketing your home well in advance to increase the chances of more buyers seeing it. Make sure to open up your home to viewings as well so potential buyers can check it out, and keep in mind that they may bring along architects or builders to see what they could do with it – but this is a great opportunity to show off your property and its assets to seal the deal!

On the day of the property auction

There are two main ways you can sell by auction, you can do it via an Auction Event or a Timed Auction, and your auctioneer will advise you on which may be the better option for your property. Both have their own advantages. If opting for a live Auction Event, then at the time of the auction, the auctioneer will continue with incremental price increases until bidding interest ceases. If someone casts a bid that is equal to or greater than your reserve price, and there is no further interest, then the hammer will be hit and your property will be sold to the highest bidder.

If you opt for the Timed Auction route, then your property will be live for users to bid on, online, over an agreed period of time. During this period, bidders can ‘watch’ your property, make incremental increases to outbid others and set a top price that they’d be happy to purchase for.

In the instance that your home is not sold or the bids aren’t equal or higher than your reserve price, then it will be withdrawn from the auction. However, at SDL Property Auctions, we continue to advertise unsold properties on our website for four weeks, where potential buyers are able to make you an offer for the best possible chance to complete a sale.

How long will it take to sell by auction?

If a successful bid is made, then the sale is binding from the day of auction, or the completion day if it is a timed auction, and you will exchange contracts. There are two types of sale, they can be under unconditional or conditional terms. If sold under unconditional terms, then the buyer will provide a deposit on the same day it was sold and then they will have 30 days to secure the rest of the funds to complete the sale. If sold under conditional terms, then the buyer will pay a non-refundable fee to reserve the property, which can vary depending on the bid they’ve made. The buyer will then have 60 days to get their affairs in order, such as arranging a mortgage, before completion. The method you wish to choose is completely up to you but again, you can always approach your auctioneer for advice for the best course of action. You can also learn more about the differences between conditional and unconditional auction sales in our dedicated blog.

Get further information on selling your property by auction with SDL Property Auctions.

If you’re interested in selling your property by auction, here at SDL Property Auctions we guide you through every step of the way. Whether it’s for a residential, mixed-use, commercial property or land, we can help. Book your free sales valuation today and get started on the auction process, or contact us directly if you want more guidance.

You can also browse our extensive library of blogs for more information about selling at auctions.