A fast, straightforward and secure way of selling, there are countless benefits to choosing auctions for selling your property. The binding contracts provide more safety and protection against buyers backing out from sales, the competitive bidding nature can improve selling prices, and the in-built time controls ensure no time wasters can lengthen the process.
If you’re considering selling by auction for the first time, or you’ve already used this route before, and have some questions – we have the answers. As auction experts, we’ve heard it all and helped even more, and have compiled a list of all the most commonly asked questions about selling a property by auction. Take a look through the FAQs below to see if we’ve already answered your questions, and if it’s not made our list yet, please reach out to our team by calling us on 0800 046 5454 or emailing us at enquiries@sdlauctions.co.uk and we’ll fill in any blanks.
Selling property by auction FAQs
What is a reserve price?
A reserve price is agreed between the person selling the property and the auctioneer prior to the auction and remains confidential to these two parties, with bidders unaware of the reserve price. If a lot fails to meet this reserve, the auctioneer is not permitted to sell it to the highest bidder and the lot will be withdrawn from the auction.
Is the guide price the same as the reserve price?
No, a guide price is not the same as a reserve price. A guide price is a reflection of the property value and is given by the auctioneer, this price generally acts as the starting bid for the property. This is not a fixed price and it may be changed at any time by the seller or by the auctioneer depending on the level of interest in the property. However, it is important to note that a reserve price on a property will always be within either + or – 10% of the guide price. You can read more about the differences between these two prices and how they’re set on our ‘how accurate are guide prices?’ blog.
Do some lots fail to sell?
Yes, if the reserve price is not met during the bidding process, then the lot will not sell. Unsold properties remain on our website and are open to offers by the general public with a set sale price. These post-auction sales typically perform well as potential buyers have more time to conduct their research before making an offer. You can learn more about unsold auction lots on our blog.
How much will it cost to sell my property by auction?
Seller fees will change depending on the auction method selected, with different options available for conditional and unconditional sales. At SDL Property Auctions, our auctioneers provide tailored advice to help ensure sellers are happy both with the method of sale, and the fees included, before adding their property to our catalogues.
Regardless of which route you’d like to take in regard to fees, however, sellers will still need to pay solicitor fees to prepare the legal pack for their property, which typically can cost up to £500. After the sale of your lot you will also need to instruct a solicitor for the conveyancing of the property, which can cost anywhere from £450 to £750. It is important to bear this in mind and set aside a budget for these costs.
I’m a seller and I can’t watch the auction so how will I know if my property sells?
After the auction has ended, one of our team will contact you to advise you of the result.
What are the two property auction methods in the UK?
You may have heard the terms ‘conditional’ and ‘unconditional sales’. Conditional sales give buyers an extra 30 days to complete the purchase, where unconditional sales must be completed within 30 days. In order to get a full understanding of each of these methods and decide which is best for you, we’d recommend reading our guide detailing the advantages and disadvantages of both. Alternatively, read the buyer FAQ section above for a brief summary of each option.
Who will conduct the viewings?
This depends on the location and condition of your property. Our team of accompanied viewers located across the country conduct viewings wherever possible, and in some cases, we may also be able to offer virtual viewings. We will not be able to conduct viewings on properties that pose a safety risk, and in some cases where a property is tenanted.
Will I need to have an EPC in place?
The majority of properties that are sold by auction will need to have a valid EPC before being sold. However, certain types of buildings are exempt from requiring an EPC rating. These include: places of worship, some buildings that are due to be demolished and listed buildings. For a full list of exemptions, make sure to read the government guidelines.
Do I have to pay Stamp Duty?
You will never have to pay stamp duty on your property as a seller. The buyer always covers this, so it is not something that you need to worry about if you are planning to sell your property by auction.
Do I have to pay Capital Gains Tax?
You may have to pay capital gains tax, depending on your property. If you are unsure, it is best to consult with your solicitor. Typically, capital gains tax is paid on properties sold that are not your main home, your property is very large (over 5,000 square metres), or if your property has been used for business purposes.
How long does completion take?
This depends on the type of auction method you choose to sell by, and whether you choose to list your property as available as an unconditional or conditional sale. Unconditional sales usually have a completion time of 30 days, unless agreed differently prior to the auction, while conditional sales have an additional exclusivity period of 30 days, taking the average completion time to 60 days in total.
Can I sell a property with a tenant in situ?
Yes, auctions can be a fantastic way to sell a property with tenants in situ as this can often attract a number of investors. Selling this way allows you to collect rent from the tenant until the sale is completed, and the buyer can then start collecting rent straight away. There are some additional nuances to selling with a tenant in situ, as you may be liable to pay capital gains tax. You might also need to prepare some additional information regarding things such as tenant deposit protection, but our experienced team can assist you with this process and you can read our tips for selling a tenanted property for further guidance.
How does an auction sale price compare to prices achieved by an estate agent?
Put simply, an estate agent price usually starts high and is negotiated down between the buyer and the estate agent. On the other hand, auction prices start low and can only increase through competitive bidding. Auctions are focused on getting a fair price for both buyer and seller, whilst creating a quick sale. Sales through an estate agent can be very lengthy and could result in a higher price, but of course there are estate agent fees to be added onto the cost of selling. It is important to research both methods to determine which suits you, and our blog on ‘What is the best way to sell a property?’ is designed to help jumpstart your reading.
What risks are involved in an auction sale?
One of the most attractive things about selling by auction is that there are not many risks. Sales are legally binding, which means that a sale is very unlikely to fall through as neither seller or buyer can back out. The biggest risk to selling by auction is setting a reserve price which may not be met. Even if this is the case, however, a post-auction sale can still be completed but you are in control of this as the auctioneer will never sell your property below your reserve price without your explicit permission. It is also worth mentioning that auctions, as an industry average, have a very high success rate and only around 20% of properties do not sell on the day.
Can I accept an offer before auction day?
Yes, you may accept an offer before auction day. If you decide to do so, the sale will still be completed under auction conditions and the auctioneer will request the 10% deposit from the buyer and the exchange of contracts to be completed.
Does my solicitor need to be present at the auction?
You will need to appoint a solicitor through the process of selling your property to create a legal pack and undertake administrative work, but they do not need to be present at the auction as their details will be made available to the purchaser’s solicitor in order to complete the sale.
Is my property suitable for sale via auction?
It is not just homes that are suitable for selling at auction, but many plots of land as well as commercial, residential, and more unusual properties have also been sold through this method. Even ‘problem properties’, such as those with subsidence and invasive plant species can be sold by auction.
We hope you’ve found the answer to your question above, but if there’s anything you would like further information on, or you’d like more advice about selling by auction in general, head over to our Seller’s Advice Hub. Alternatively, you can get the selling process started by clicking the button below.