Sell a house by auction - can't find independent advice anywhere

63_jen

Anyone know if a useful guide exists? Some companies offering their wise thoughts but I don't know what I don't know that way.
Many tks

NameUnavailable

DO NOT, REPEAT DO NOT try to sell via 'modern method of auction'.

Proper auctions are fine, you set a reserve price (which the auction house will guide you on) and can also set special conditions of sale, e.g. buyer pays X amount towards your fees, and wait for the auction day. Obviously get your solicitor involved asap as you will exchange contracts immediately after the auction (assuming it meets the reserve) and complete usually 4 weeks later.

63_jen

NameUnavailable said:

DO NOT, REPEAT DO NOT try to sell via 'modern method of auction'.

Proper auctions are fine, you set a reserve price (which the auction house will guide you on) and can also set special conditions of sale, e.g. buyer pays X amount towards your fees, and wait for the auction day. Obviously get your solicitor involved asap as you will exchange contracts immediately after the auction (assuming it meets the reserve) and complete usually 4 weeks later.

Appreciate that, not sure what "modern" auctions are but definitely would only use an agency's or auction house. Is that really all I need to know? Many tks 

fishfingerbutties

Completely agree with NameUnavailable about the modern method of auction.

We looked into putting a house into auction, and similarly didn't know who to turn to. We approached auctioneers who were really helpful as had some guides and people to talk to. Might be worth approaching one and seeing if they can offer the same.

63_jen

fishfingerbutties said:

Completely agree with NameUnavailable about the modern method of auction.

We looked into putting a house into auction, and similarly didn't know who to turn to. We approached auctioneers who were really helpful as had some guides and people to talk to. Might be worth approaching one and seeing if they can offer the same.

Much appreciated - will try that and hopefully soon learn!

youth_leader

Do you have no choice but to go to auction?  Could you avoid it?  I sold through traditional auction but as it was Covid it was on-line, I do feel I might have missed out on bidders.  Check if it's live or on-line.

It was a lot more expensive than I'd realised, I hadn't done my sums properly.

I paid £790 to be entered into the catalogue and auction, £1200 to my solicitor to do the legal pack.  It didn't reach the guide price on the day, so the auction house rang round all viewers, and rang me with a bid £40K under the guide price.  As I was desperate to sell I accepted.  The commission of 2.5% for the sale on £275K was a whopping £6,600 including VAT.   

NameUnavailable

63_jen said:

NameUnavailable said:

DO NOT, REPEAT DO NOT try to sell via 'modern method of auction'.

Proper auctions are fine, you set a reserve price (which the auction house will guide you on) and can also set special conditions of sale, e.g. buyer pays X amount towards your fees, and wait for the auction day. Obviously get your solicitor involved asap as you will exchange contracts immediately after the auction (assuming it meets the reserve) and complete usually 4 weeks later.

Appreciate that, not sure what "modern" auctions are but definitely would only use an agency's or auction house. Is that really all I need to know? Many tks 

It's a 'service' often offered by estate agents so beware!! It is kind of like an ebay auction where your property is on offer for several weeks, rather than an on the day proper auction.

Plenty of threads already on here about why you should avoid them.

Why are you considering selling at auction? It is ideal for certain types of properties (hard to mortgage, appealing to investors) or if you just want a quick sale but are prepared to - probably - sell for less than you'd get if you wait for the right buyer to come along.

eddddy

A 'conventional' auction is an unconditional auction - when the hammer (or virtual hammer) drops the property is sold and the buyer cannot back out (unless they breach the contract). So there isn't really time for buyers to get a mortgage etc.




The modern method of auction is a conditional auction - when the hammer (or virtual hammer) drops, the buyer has only reserved the property. But the buyer has to pay a hefty non-refundable reservation fee (often a minimum of £6k) to the auctioneer on top of the bid price.

The buyer usually has 6 weeks to arrange a mortgage, get surveys etc. The buyer can back-out if they can't get a mortgage, or the survey is bad etc.

The big problem from the buyer's perspective is they don't get their reservation fee back if they back-out. So it's a big risk, which probably puts a lot of people off bidding.

Murphybear

Which have a very good guide to property auctions. 

chasingfreedom

I have to say we avoided all houses being sold via modern auction like the plague. The hefty fees really put us off. Buying a house is expensive enough without another 6 or 7k on top.

fishfingerbutties

youth_leader said:

Do you have no choice but to go to auction?  Could you avoid it?  I sold through traditional auction but as it was Covid it was on-line, I do feel I might have missed out on bidders.  Check if it's live or on-line.

It was a lot more expensive than I'd realised, I hadn't done my sums properly.

I paid £790 to be entered into the catalogue and auction, £1200 to my solicitor to do the legal pack.  It didn't reach the guide price on the day, so the auction house rang round all viewers, and rang me with a bid £40K under the guide price.  As I was desperate to sell I accepted.  The commission of 2.5% for the sale on £275K was a whopping £6,600 including VAT.   

These fees aren't that unusual, but as you say you didn't do your sums properly and you chose to accept the sale cost.

I guess a reminder to the OP to make sure you fully understand the costs structure. The auction house gave us an estimated costs structure assuming a hypothetical sale price so it was clear what it would cost overall.

As it was we didn't end up going with that and went via traditional EA.