Selling a property via auction

hairymaclary

Looking for advice on selling a property via auction. For various reasons i'm looking for a quick, hassle free sale, and appreciate this may be reflected in the price I would achieve. What criteria would the property need to fit in order to be suitable for auction, and what does the process look like? Any thoughts appreciated.

Yorkie1

There are 2 types of auctions commonly mentioned on here: a) traditional auction method; and b) modern method of auction.

The standard advice to buyers is to avoid b) - MoMA. So if you were considering that method, you should be aware that you are likely to significantly reduce the number of potential buyers.

youth_leader

I sold at traditional auction.  My listed grade II building needed work which I couldn't afford.  I would never sell at auction again.

I sold with Pattinson, unfortunately in March 2020 during lockdown, so the auction was on line only. The company did the viewings, I'd already moved into a rented cottage and wasn't present during the viewings, but knew they allowed around 12 people sometimes which I disagreed with.  I was upset never to find my son's camera again.  The weather was bad and I had a lot of muddy footprints to clean up.  I was annoyed to find a surveyor letting himself in one day, they hadn't informed me someone had commissioned a survey.  I had left my elderly cat there as I didn't want to move her until the house was sold.

 I paid £795 to go into the catalogue, £1200 to my solicitor for the legal pack, and when it sold, 2.5% commission which turned out to be £6,600 including VAT on my £275K sale. 

The buyer did have a mortgage and wanted the weekend to pass it 'by his lender' - and then asked for eight weeks to completion, rather than the four I'd signed up for.  I agreed to this, but had to buy 600 litres of oil as it was so cold here - he refused to pay for this.  

Albermarle

hairymaclary said:

Looking for advice on selling a property via auction. For various reasons i'm looking for a quick, hassle free sale, and appreciate this may be reflected in the price I would achieve. What criteria would the property need to fit in order to be suitable for auction, and what does the process look like? Any thoughts appreciated.

Pretty much anything can be sold at a traditional auction, that is their main driver.
Most are properties that struggle to be sold via the conventional route. eg unmortgage able, need a LOT of work, short leases, empty commercial buildings  etc 
If your property does not fit this description, you might well be better off selling it the usual way, but with a sharp price and insist on chain free buyers only. Not guaranteed to be hassle free, but then nothing is when dealing with property.
Whatever you do avoid the ' sell your house fast for cash' merchants. 

RHemmings

youth_leader said:

I sold at traditional auction.  My listed grade II building needed work which I couldn't afford.  I would never sell at auction again.

I sold with Pattinson, unfortunately in March 2020 during lockdown, so the auction was on line only. The company did the viewings, I'd already moved into a rented cottage and wasn't present during the viewings, but knew they allowed around 12 people sometimes which I disagreed with.  I was upset never to find my son's camera again.  The weather was bad and I had a lot of muddy footprints to clean up.  I was annoyed to find a surveyor letting himself in one day, they hadn't informed me someone had commissioned a survey.  I had left my elderly cat there as I didn't want to move her until the house was sold.

 I paid £795 to go into the catalogue, £1200 to my solicitor for the legal pack, and when it sold, 2.5% commission which turned out to be £6,600 including VAT on my £275K sale. 

The buyer did have a mortgage and wanted the weekend to pass it 'by his lender' - and then asked for eight weeks to completion, rather than the four I'd signed up for.  I agreed to this, but had to buy 600 litres of oil as it was so cold here - he refused to pay for this.  

Had you advertised the property for sale previously to the auction. If so, how much did you list it for? And, did you receive any offers and if so, for how much? 

Surely exchange of contracts occurs on the gavel falling. So, what did the buyer mean by having additional time and passing it by their lender? 

Herzlos

If you want a quick sale, talk to the local estate agents and see if they have any potential buyers lined up, then see what they reckon it'd need to be priced at to sell quickly.

How quickly it'll sell will depend on the house. I put an offer in on my current house the day *before* it went on rightmove, and was accepted after closing the following Friday.

Realistically, the paperwork side of the sale could take much longer than the selling part.

youth_leader

@RHemmings,  I hadn't been widowed long when I went on the market, I should have waited.   I made a big mistake and went with a small independent EA at first - who couldn't afford to advertise on RightMove.  September 2018.  I was selling a listed II railway station, the roof needed replacing, I'd been quoted £30K and my husband had died.

The EA told me fully restored the station would be worth £600K, and as work needed doing, to try for £500K.  It was 264 sq m.  I didn't receive any offers at this price (we were on a live line), and I agreed to drop to £450K. By this time I'd had about fifteen viewings.   I did receive an offer of £390K in May 2019 from a cash buyer.  I told the EA I would have liked £400K, but not to negotiate with the buyer - she ignored my request and asked the buyer to increase, he withdrew.  I then found out he wasn't a cash buyer at all.

I changed to another EA in the June, who said to try for £400K.  We had about fifteen viewings when I received another cash offer in August 2019, £355K.  My daughter and I thought it was going to progress and we went house hunting.  Six weeks later, having dodged the EA successfully to prove funds, the buyer pulled out by email late at night.  He didn't have any cash, his ex wife had it in Sweden. 

I had chosen this buyer from two offers and when it fell through, the EA contacted the mortgage offer buyer again - £350K.  I accepted in late September 2019, and he had a survey.  Six and a half hour survey with an independent, two hours with mortgage lender.  Survey came back at £0 from the mortgage lender. EA rang me and said they wanted a damp/timber survey and as a 'gesture of goodwill' would I pay for it. 

I spent my £300 Christmas food money paying for a survey on 8 January 2020.  When the man turned up, I'd been told to get a PCA firm, he asked why I hadn't lifted the floorboards.   I hadn't been told to do this, and none of the trades I rang were back at work yet.  Disaster.  I forwarded the report to the EA, and the buyer's mortgage lender threw it out as completely unsuitable.

The buyer reduced his offer to £305K.  He sent a long email to the EA explaining this in February 2020 and said if  the 'seller' spends £10K doing the damp, £17K doing the roof repairs, and some other ridiculous figure to replace all the ground floor floorboards, a total of £50K approximately,  his mortgage company would 'inspect' my work, and if good enough, lend him £330K.  Otherwise he was now offering £285K.

I left the EA and withdrew from the sale, it was dreadful, I couldn't bear any more viewings with 'too much work' comments and didn't want anything more to do with this man.  

I found a rental, went to auction, and lockdown was announced the week of it, on line only.  I had two bids, nowhere near the reserve - £200K and £235K.  Unsold.   It was impossible to contact anyone at the auction house as everyone was at home, but someone rang me and said they would be contacting the viewers.  The next day, Thursday, the auction house rang me and said they'd had two bids - £240K and £275K.  The higher bidder had wanted the weekend to 'pass the sale in front of his underwriters' - as well as eight weeks to completion. 

Unfortunately for me the highest bid was from the developer, and as he wanted eight weeks and I was worried about pipes freezing, I had to order more oil.  When it came to completion the week before he announced he wouldn't buy my life sized bronze lions which I was offering to him for a song, and he wanted them 'off the property' before completion.  So very luckily for me a nice local family had a cherry picker, and helped me remove them from the top of the garage pillars.  He also wouldn't pay for the oil.

All in all a horrific experience, I'd always heard of 'old widows' being taken advantage of, and there I was.  

RHemmings

youth_leader said:

@RHemmings,  I hadn't been widowed long when I went on the market, I should have waited.   I made a big mistake and went with a small independent EA at first - who couldn't afford to advertise on RightMove.  September 2018.  I was selling a listed II railway station, the roof needed replacing, I'd been quoted £30K and my husband had died.

The EA told me fully restored the station would be worth £600K, and as work needed doing, to try for £500K.  It was 264 sq m.  I didn't receive any offers at this price (we were on a live line), and I agreed to drop to £450K. By this time I'd had about fifteen viewings.   I did receive an offer of £390K in May 2019 from a cash buyer.  I told the EA I would have liked £400K, but not to negotiate with the buyer - she ignored my request and asked the buyer to increase, he withdrew.  I then found out he wasn't a cash buyer at all.

I changed to another EA in the June, who said to try for £400K.  We had about fifteen viewings when I received another cash offer in August 2019, £355K.  My daughter and I thought it was going to progress and we went house hunting.  Six weeks later, having dodged the EA successfully to prove funds, the buyer pulled out by email late at night.  He didn't have any cash, his ex wife had it in Sweden. 

I had chosen this buyer from two offers and when it fell through, the EA contacted the mortgage offer buyer again - £350K.  I accepted in late September 2019, and he had a survey.  Six and a half hour survey with an independent, two hours with mortgage lender.  Survey came back at £0 from the mortgage lender. EA rang me and said they wanted a damp/timber survey and as a 'gesture of goodwill' would I pay for it. 

I spent my £300 Christmas food money paying for a survey on 8 January 2020.  When the man turned up, I'd been told to get a PCA firm, he asked why I hadn't lifted the floorboards.   I hadn't been told to do this, and none of the trades I rang were back at work yet.  Disaster.  I forwarded the report to the EA, and the buyer's mortgage lender threw it out as completely unsuitable.

The buyer reduced his offer to £305K.  He sent a long email to the EA explaining this in February 2020 and said if  the 'seller' spends £10K doing the damp, £17K doing the roof repairs, and some other ridiculous figure to replace all the ground floor floorboards, a total of £50K approximately,  his mortgage company would 'inspect' my work, and if good enough, lend him £330K.  Otherwise he was now offering £285K.

I left the EA and withdrew from the sale, it was dreadful, I couldn't bear any more viewings with 'too much work' comments and didn't want anything more to do with this man.  

I found a rental, went to auction, and lockdown was announced the week of it, on line only.  I had two bids, nowhere near the reserve - £200K and £235K.  Unsold.   It was impossible to contact anyone at the auction house as everyone was at home, but someone rang me and said they would be contacting the viewers.  The next day, Thursday, the auction house rang me and said they'd had two bids - £240K and £275K.  The higher bidder had wanted the weekend to 'pass the sale in front of his underwriters' - as well as eight weeks to completion. 

Unfortunately for me the highest bid was from the developer, and as he wanted eight weeks and I was worried about pipes freezing, I had to order more oil.  When it came to completion the week before he announced he wouldn't buy my life sized bronze lions which I was offering to him for a song, and he wanted them 'off the property' before completion.  So very luckily for me a nice local family had a cherry picker, and helped me remove them from the top of the garage pillars.  He also wouldn't pay for the oil.

All in all a horrific experience, I'd always heard of 'old widows' being taken advantage of, and there I was.  

Thank you very much for providing the background. I'm sorry this whole ... 'process' happened to you and hope you are in a better place (figuratively and literally) now. 

youth_leader

Thank you @RHemmings.  Eight years on and I'm a lot stronger and when I have to sell this bungalow, I'll certainly not take any nonsense from a chancer like that again. I was far too vulnerable at the time, but I couldn't wait, the big storms here were damaging the original 1847 slate roof and single glazed windows every time.  The only place I was safe from one of the seven chimneys coming down was the larder, and it was too small to sleep in.  Storm Dennis was terrifying.

Miri_J

I recently spoke to an auctioneer about selling my house. He had a thorough talk with me, looked at our EA listing and advised against. He advised to stick with the traditional EA's. We've had a number of potential buyers pull out due to a flood risk. However, he said that our house is too good to list at auction and wouldn't raise the interest or buzz that would be needed to get a reasonable price at the auction. He said eventually someone would come along who will love our home and will accept the risk "you've just been incredibly unlucky with your buyers" were his words. He suggested we would be lucky to get about 80% of the value of our house at auction, I've seen figures of 70% elsewhere. The fees quoted on this thread don't seem any lower either.

youth_leader

I am pleased for you Miri_J. I had been advised to set the 'guide price' at £390K, with a reserve of £350K.  I got two very low bids as I said earlier, and only one of the bidders had viewed, it wasn't sold on the day.  So stressful as it was lockdown, and when I finally got through to someone at the auction she was out on her bike, not what I'd expected. 

I was also unhappy at the amount of people the auctioneer allowed to view, with just one person present.  Someone broke the handle on my Aga during a viewing, and as I said earlier, I never found my son's camera again.  It was February/March and a muddy wet month, not great for my carpets.