25th April 2024

Identifying what types of properties sell well at auction

Most types of property, from empty land to residential properties and commercial lots can be sold by online auction, however some are more suited to this method of sale than others. By identifying these properties and choosing to sell by auction, there is an excellent opportunity to make a good return on your investment as well as scope to turn potential withdrawals from the open market into secure sales. 

If you’ve got property that you’d like to sell and you’re not sure about identifying potential leads, keep reading as we discuss some of the key things that you should look out for when deciding on the best method of sale for the type of property you own.

Why auction a house instead of selling and what to look out for

If you’re looking to sell a residential home but aren’t sold on the idea of using an estate agent, an auction may be a better option for you. There are plenty of reasons why sellers would benefit from choosing this method rather than the more common route of using an estate agent for house sales. We’ve compiled a list of these reasons below, which highlight why certain types of residential properties are best suited to the auction method.

Inheritance properties and family disputes

Inheriting a property from a relative who has passed away can be a difficult situation, especially if there are multiple parties involved who have different ideas in mind about what to do with the property or what the value of it is. These disagreements can hold up a sale, and prevent beneficiaries from getting any monetary value from selling the home. Auctions eliminate any disputes over the true value of the property, and sales must be completed in a defined timeframe. This helps to ensure that the process runs smoothly and fairly for the parties involved.

Sellers who are looking to make a quick sale

Personal circumstances can play a huge role in property sales. For example, if you’re relocating or have experienced a relationship breakdown, it’s likely that you’ll be looking for a quick sale in order to secure the funds for your next living space. Online auctions offer a fast and secure method of sale which can free up funds from assets for any parties involved, instead of potentially waiting for months for estate agent sales to reach completion.

Sellers who need security

Selling a property is a huge financial decision, and the pressure becomes intensified if you need the money within a defined timeframe. Selling by online auction eliminates the anxiety of wondering whether a buyer will pull out of your sale, as the sale is legally binding and both the fee and deposit is paid as soon as the auction ends, depending on whether the sale is conditional or unconditional. If under rare circumstances a buyer does pull out, they will still have to pay the fees and likely receive a penalty which almost completely eliminates the fall-through rate of sales.

Chain-free and vacant properties

Sales through estate agents are typically subject to lengthy chains which can leave buyers and sellers waiting for months to complete a purchase. If you have a chain-free property, don’t put it at risk of re-entering the cycle. An online auction will keep things moving forward at pace, no chains or strings attached.

Best and final offers

Auctions are very competitive in nature, especially for lots that generate substantial interest. If you have a property that you know will be competitive, such as in a highly desirable area then it may be better to sell by auction without going to ‘best and final’ offers. Auctions will offer complete transparency to the buyer, and likely drum up more interest as buyers feel more pressure to secure the property, offering the same benefits of best and final offers but with a more straightforward process.

What to look for at the property review stage

If you’re already selling via an estate agency but aren’t making the progress that you had hoped, online auctions can offer a viable alternative to help you get the results you want. Below are some of the most common reasons why switching to auction may be of more benefit.

Properties with little interest

If a property has had little or no interest, the vendor may feel dropping the price is their only option. However, switching to online auction can achieve or even exceed the original asking price. Often, if a property has no interest it may not be attracting the right audiences. Auctions have a diverse range of buyers from developers to investors who are able to see the potential in a property, which can get your home sold faster and for more.

Seller’s circumstances change

A seller may have been in no rush to sell when they put their property on the market, but circumstances – both personal and financial – can change, meaning a switch to online auction could be beneficial for those looking to make a quick and secure sale.

Fall-throughs

Fall-throughs can be costly for all parties and frustrating for sellers as it can have a knock-on effect on your own purchase if you’re buying a home as well as selling. As mentioned prior, sales falling through are virtually eliminated by online auctions, so if this is something that you’re experiencing it may be time to consider switching your sale methods.

What other types of property sell well by auction?

Of course, it’s not just ready-to-move-into residential homes that perform well at auction. There are plenty of other types of property that can make a profit. If you have any of the following types in your portfolio, you may wish to consider taking advantage of the online auction method.

Problem properties

If you have a home or commercial lot that has any issues with its structure, invasive species, or any reason why it is unmortgageable, an auction will be your best bet. Property auctions attract renovators, developers, and investors who can often buy in cash and are looking for projects that can turn a profit once work is completed, this is perfect for problem properties that can’t be bought with a mortgage. You can read more about selling problem properties by auction in our dedicated blog.

Tenanted properties

Again, because many investors have their eyes on auction properties, you’ll be able to generate plenty of interest from landlords looking to expand their portfolio. As such, properties with tenants in situ typically perform very well at auction as it shows potential investors that they will have immediate, guaranteed income upon the completion of the sale without having to advertise to secure their own tenants. Learn more about how to sell a tenanted property in our comprehensive guide.

Commercial properties

Selling commercial lots by online auction is a good idea as potential buyers tend to be more experienced. Selling by auction also significantly reduces the time that it takes to sell when compared with typical agency sales. Many unusual types of properties also perform well at auction, so commercial lots like pubs and leisure spaces are well suited to this sale method.

Developmental land

All types of land are typically well received at auction, as there is a great niche market of potential buyers who are looking for opportunities for land development. Land with access issues may also be better suited to auction than freely accessible land, as this can be a difficult issue for large-scale developers to deal with. The pool of diverse buyers with different development goals at auction is more likely to generate genuine interest in your land.

Sell your property by auction with SDL Property Auctions

If you’re thinking about selling up, we can provide you with a free no obligation valuation to help inform your decision. Alternatively, if you have any questions or queries regarding selling via online auction our team will be happy to help. Simply contact us with your query and a member of our team will be in touch with you shortly. In the meantime, you can get a greater idea of what properties are selling well at auction by browsing our Auction Events catalogues and Online Auctions.