Selling a House by Auction - has anyone here done it?

WestLondonOlga

My mother died last year and left the house to my siblings and me.  There are four of us, but I am the one named on the Grant of Probate.  We have been trying to sell the house (where I also live, along with my youngest sibling who was my mother's carer) for some months, and have accepted 3 ever-lower offers which have all been withdrawn or fallen through.  There is extra stress as my late mother had taken an equity release loan, which needs to be paid back, plus interest of course (it is well over half the cost of even our highest previous offer).  Our estate agent has suggested that putting the house in an auction might be the way to go.  Has anyone here sold their house by auction?  We are weighing up the pros and cons, and it would be useful to know what questions we should be asking the EA and auctioneers. The EA says that we would only be paying their agency fee as they "work in partnership" with a firm of auctioneers; this seems too good to be true? What costs and fees should we be asking about?

cymruchris

I haven't bought or sold at an auction, and I'm sure there'll be those with more accurate advice, but my understanding is that auction should be a last resort option for many (not all). The value of the property would likely be less than even your low offers as generally 'auction' properties are sold as such when in many cases there are underlying problems that need to be resolved.  The fees (depending on the auction type) can be quite considerable for the buyer - so these are usually taken into account when people bid. If you know there's going to be a £7k fee (for example) - your bid would likely reflect that, meaning less money in your pocket (and plenty in the estate agent and auctioneers pocket).

In this case you mention that there's a loan that needs to be repaid with interest being applied, and that there's a degree of stress involved because of the fact three offers have fallen through.

It ultimately has to be your decision in terms of how you proceed - if you're ok with getting less for the property, and just settling everything as quickly as possible, auction might be the right route for you.

If however you would prefer to maximise the sale price, I'd probably hold out for a fourth and final time to see if you can get a regular sale.

Has the house been emptied? Does it need a lot of work? Do the photos on the listings show it in its best light? How's the house priced compared to others in the local area? If you wanted to share a few details - some experienced posters might be able to recommend how you'd increase the likelihood of a sale.

RAS

Is this a traditional auction?

Or are they trying to get you to sign up for the Modern Method of Auction?

Doozergirl

If it goes into an auction it needs to be a proper auction, where contracts are exchanged on the day, a 10% deposit is paid to your solicitor and legal completion occurs 28 days later.  

Do not enter into any other kind of 'modern method' of auction with the likes of 'i am sold' which is just an expensive joke and most buyers will run a mile from.  The buyer pays a non-refundable deposit which is the (two) agents fees and there's still no exchange of contracts for weeks.   It just makes the costs of buying somewhere more for the buyer so they reduce the price they are willing to pay.  

diystarter7

Hi OP

Dont go for the cheapest costs go for the one that advertises widely and has a high sales record

Dont do the online but go for proper auctions

NB: Be very aware of costs if it does not sell and they can be easily hundreds of pounds, not recently checked so check
Also get a reserve as you never know, a bit of safey like that is helpful.

Good luck

SavingPennies_2

What were the reasons for the previous sales falling though? Ie is there something that needs to be addressed?

WestLondonOlga

One was early on in the process, but then interest rates went up. I think they were inexperienced developers too and hadn't got "all their ducks in a row".  The second ones pulled out, again developers, they gave their reason as they weren't going to get permission to make as many flats out of the house as they thought. The last lot were supposedly a straightforward sale, we had been led to believe, but then I was notified by my solicitors that they wanted to bring in an Option Agreement, so not straightforward at all.

"End user" buyers (ie, want to buy the house to live in, not to flip and sell on) often give feedback about the size of the garden.  It is relatively small for the size of the house, but I would say more an awkward shape rather than small.  Not much we can do about the size of the garden.

WestLondonOlga

diystarter7 said:

Hi OP

Dont go for the cheapest costs go for the one that advertises widely and has a high sales record

Dont do the online but go for proper auctions

NB: Be very aware of costs if it does not sell and they can be easily hundreds of pounds, not recently checked so check
Also get a reserve as you never know, a bit of safey like that is helpful.

Good luck

Thanks, the EA apparently works in association with two auctioneers, and I didn't like the sound of the online one.  I will find out who the other ones are and do some research. Yes, we will definitely specify a reserve, and I will find out the costs and fees.

diystarter7

WestLondonOlga said:

diystarter7 said:

Hi OP

Dont go for the cheapest costs go for the one that advertises widely and has a high sales record

Dont do the online but go for proper auctions

NB: Be very aware of costs if it does not sell and they can be easily hundreds of pounds, not recently checked so check
Also get a reserve as you never know, a bit of safey like that is helpful.

Good luck

Thanks, the EA apparently works in association with two auctioneers, and I didn't like the sound of the online one.  I will find out who the other ones are and do some research. Yes, we will definitely specify a reserve, and I will find out the costs and fees.

Great, thanks

Be aware of the reserve they agree with you to get your bunsiess as if it does not meet the reserve, as I said if it dont sell there will be fees and they may encourage you to sell at the last offer plus neogtiations if any

The bottom line, as long as you are of the costs etc, the proper auction is for you

Good luck

cymruchris

Have you looked at the option of changing estate agents? What contract have you signed with your existing agent in terms of 'get-out' clauses?

eddddy

WestLondonOlga said:

One was early on in the process, but then interest rates went up. I think they were inexperienced developers too and hadn't got "all their ducks in a row".  The second ones pulled out, again developers, they gave their reason as they weren't going to get permission to make as many flats out of the house as they thought. The last lot were supposedly a straightforward sale, we had been led to believe, but then I was notified by my solicitors that they wanted to bring in an Option Agreement, so not straightforward at all.

So the property has development potential. In that case, a "traditional" unconditional auction could be a sensible choice.


To be honest, you might get more money if you agree to an Option Agreement (or Conditional Contract) with a developer, instead of an auction. So the developer only buys if they can get planning permission.

But that takes longer, and if planning permission is refused, the house doesn't sell - and you're back to square one.

And you really need an estate agent who is experienced in selling development property, and who has developer contacts, to do that.