Contemplating selling at auction - any advice?

Casement_2

Hi,

The background in brief: we are trying to sell our first home, a 2-bed terraced house in an inner-city location, on market for a month and had a couple of viewings but no offers. Property is not in immaculate order but is modernised and reasonably ok. Comparable properties are on market for £109k-£110k, and we have just cut our asking price from £110k to £100k. Frankly, I am getting a bit twitchy about the state of the market and our neighbours (mildly annoying, worried about it getting worse). We have a fair chunk of equity and could go down to c£75k if necessary.

So, I am wondering whether selling at auction could be an option, and have a few questions:

What are the typical upfront costs and what is non-refundable if we don't meet our reserve price or have to pull out?
Is there anything to stop us from listing the property for auction in a few months' time and leaving it on the open market with estate agents in interim? (I understand agents would be annoyed and we would have to pay an admin fee for taking property off market with them if we sell at auction, but are there any other likely implications?)
I understand the buyer would normally have to complete within a month, therefore we would have to move out within that timescale - is this correct?
Are there any major differences in the conveyancing process, or is it just a question of having everything ready upfront, e.g. searches etc?
Are there any other signficant pitfalls or risks that we need to be aware of?

If anyone has any similiar experiences they could tell me about, I would be most grateful.

Many thanks in advance.


Casement

giddypenguin

Hi, we were thinking of selling ours through auction as our house needed quite a bit of work doing to it, and people kept backing out after doing surveys (you would think the cracks and damp would give it away) anyway, we weren't sure of how it all worked (well, other than watching homes under the hammer) and so we did a bit of google-ing, found a few property auctioneers and e-mailed them with a link to our right move ad, which estate agents we were with etc and all our questions (which were similar to the ones you mentioned) a few of them were extremely helpful, telling us what other properties in the area had gone for, fees, trends and what they thought was realistic for us.

Maybe you should try that.

Eric1

Casement wrote: »

We have a fair chunk of equity and could go down to c£75k if necessary.

By auctioning it you'll exclude lots of potential buyers. The rest - cash buyers who can afford to buy at auctions - will want a bargain, below open market prices, and rightly so.

Casement_2

Hi Eric,

Thanks for your comments - yes, I am well aware that a low price is the trade-off for a quick sale.

Giddypenguin - did you sell on the open market in the end, or just decide against the auction route?

Any other comments would be gratefully received.

Thanks.

new_home_owner_3

Eric1 wrote: »

By auctioning it you'll exclude lots of potential buyers. The rest - cash buyers who can afford to buy at auctions - will want a bargain, below open market prices, and rightly so.

with auctions if you advertise it right the people who want to buy it will be there, and if you get two people bidding against each other i think you will be surprised how much you will get.

You can always put a reserve on it.

blackshirtuk

Casement wrote: »

Is there anything to stop us from listing the property for auction in a few months' time and leaving it on the open market with estate agents in interim? (I understand agents would be annoyed and we would have to pay an admin fee for taking property off market with them if we sell at auction, but are there any other likely implications?)

I would advise against marketing the property with an EA while also engaging an auction house. You could be facing 2 sets of fees as both could say that your buyer found the property through "Their" advertising.

With an auction house you pay an upfront fee( sorry not sure how much) and then a percentage on the sale price.

The legals all have to be prepared well before the sale, although the auction house will advise on what documentation to prepare. At the fall of the hammer 10% of purchase price is due with the balance generally 4 weeks later. If the buyer fails to complete the 10% is yours and you re-market it.

timmyt

Casement wrote: »

Hi,

The background in brief: we are trying to sell our first home, a 2-bed terraced house in an inner-city location, on market for a month and had a couple of viewings but no offers. Property is not in immaculate order but is modernised and reasonably ok. Comparable properties are on market for £109k-£110k, and we have just cut our asking price from £110k to £100k. Frankly, I am getting a bit twitchy about the state of the market and our neighbours (mildly annoying, worried about it getting worse). We have a fair chunk of equity and could go down to c£75k if necessary.

So, I am wondering whether selling at auction could be an option, and have a few questions:

What are the typical upfront costs and what is non-refundable if we don't meet our reserve price or have to pull out?
Is there anything to stop us from listing the property for auction in a few months' time and leaving it on the open market with estate agents in interim? (I understand agents would be annoyed and we would have to pay an admin fee for taking property off market with them if we sell at auction, but are there any other likely implications?)
I understand the buyer would normally have to complete within a month, therefore we would have to move out within that timescale - is this correct?
Are there any major differences in the conveyancing process, or is it just a question of having everything ready upfront, e.g. searches etc?
Are there any other signficant pitfalls or risks that we need to be aware of?

If anyone has any similiar experiences they could tell me about, I would be most grateful.

Many thanks in advance.


Casement

auctions are for estate agents who want to get their commission and do not care about getting best price. discuss.

blackshirtuk

timmyt wrote: »

auctions are for estate agents who want to get their commission and do not care about getting best price. discuss.

Agree! but also for sellers wanting to sell and prepared to take a hit on price. Win for EA, fee paid in 4 weeks, but also win for seller, house sold and money in 4wks.

Don't all EA want their fee and not care about the best price?:rotfl:

tawse57

I would suggest to find out when seveal auctions are coming up in your area - EAs advertise them, some solicitors and some of the specialise auction houses. That housepricecrash site seems to have loads of info on auctions over there.

The reason why I am answering though is that I would imagine it would be a good idea to go and view a few auctions to see what is going on. I started doing this a few years ago - no intention to sell or buy - but it was an eye opener learning some of tricks such as bids being taken off the wall. I actually saw a man who was bidding up someone else run out of the room when the other bidder dropped out - only to return 10 minutes later to pick up his car keys.

Otherwise, if you do not get the info you need here try that housepricecrash site as someone over there is regularly posting links to auction houses. They might be able to help you.

Bets of luck.

Henry_P_Chester

If your willing to take a lower price, which you probably will at an auction why not knock the asking price down to say 90k and massively undercut everyone else? It would surely be snapped up quite then. If still nothing after a month or so maybe then try the auction idea?

Bootsox

new_home_owner wrote: »

......and if you get two people bidding against each other i think you will be surprised how much you will get.......

Yes the sellers dream, if only the OP was selling a Rembrandt or a Picasso. Fact is the market is becoming flooded with property.

I find Allsop's a useful website (google it) as it gives you access to previous auction results which can be useful for gauging the market and outcomes.