Selling Flat via a Property Auction

youth_leader

My auction representative initially recommended I set my reserve high at £390K, and said I'd be charged to increase it.  After consideration I thought it was too high, and reduced it to £340K.  My 'guide price' was £315K.

It was the very first week of 2020 lockdown and I was telephoned the day before to let me know the auction would on line, I hadn't realised the time would change so drastically and when I logged in I only had two bids - one for £200K, one for £235K.  I phoned in, and they said they would be approaching all 33 viewers the next day to see if they could 'bring it over the line'.  The next day they phoned me and said one of the original bidders had increased his bid to £240K, and a viewer who hadn't bid offered £275K.  I was really worried about the effects of the pandemic, and as a listed building that needed renovation, had already been on the market eighteen months with consistent 'too much work' comments from viewers.  The bid was just enough for me to buy somewhere else, I had to make the decision to settle for so much less than I'd been led to believe I could achieve so I could move on.  I accepted the bid, the thought of another winter there alone was so daunting, freedom is priceless.

We are all so wise in hindsight though and I do encourage you to continue hoping for 'the one'. I now believe if I had continued the very difficult and ugly negotiation through the estate agent with this person (they introduced him some months before and I left the EA and withdrew from the sale with him),  I possibly could have got more.  As a recently widowed woman, I just wasn't strong enough.  Even with the auction conditions of four weeks to completion he asked for eight - and then wouldn't pay for the oil I'd had to buy to accommodate his request.   I did let the EA know I'd sold to him, they waived their fee.

GDB2222

eddddy said:

GDB2222 said:

Decent auctioneers try to keep guide prices and reserves roughly in line, but there’s no firm connection.

The ASA has made a ruling that the Guide Price must not be more than 10% below the Reserve Price - to avoid misleading consumers. They say they will take enforcement action against auction houses who break this rule.


People sometimes suggest that the Reserve Price (and hence Guide price) could be increased just before the Auction - but I suspect that the ASA would say that's just as misleading to consumers. So, again, they might take enforcement action.

So it's best to check with the auction house in advance if they'll agree to that tactic - as it's the auction house who will face enforcement action from the ASA. Whilst I don't think the ASA can issue fines, the auction house might not want to risk the reputational damage of being 'named and shamed' for misleading consumers, and risk the potential resulting loss of future business.

The ASA is completely toothless, but it’s possible that the auction house would not want to upset them. 

You would need to consider the contract you have, but I don’t think that they can stop you increasing the reserve.