A Property Auction is a collective sale, designed to provide provide a way of selling properties quickly and more easily than on the open market.
Properties are sold at auction for a number of reasons:
One of the main advantages of selling property at auction is the speed at which the transaction can be progressed. The whole process takes about 8 weeks and there are no chains. Exchange of contracts takes place when the 'hammer falls' and completion is usually no more than 4 weeks later.
If you decide to sell your home at auction, it is important to select the right auctioneer.
Auction houses fall into two groups: local and national.
A national auctioneer would include 100s of properties from around the UK in one auction which is usually held in London.
In contrast, a local auctioneer, usually a small estate agency company will hold a small auction above a public house or a village hall and is only likely to attract purchasers located within the region.
Auction houses that are able to offer both, such as Countrywide Property Auctions, often provide the best solution. Auctioneers such as this sell properties at key regional centres and include all regional properties in a single catalogue. Key benefits of auction houses that offer a regional approach and market to the whole of the UK are:
When choosing an auction house you should also opt for one that is able to market your property effectively. A specialist property auctioneer will use newspapers, property portals, and their own websites to advertise property for sale. Additionally those with links to an estate agency network will advertise property in relevant branches.
Before agreeing to work with a particular auctioneer, be sure to review their terms of appointment. These will include:
Having decided to sell your property at auction, the next step is to appoint a property solicitor. Your solicitor will prepare contracts and the legal pack and will set out any special conditions that might be pertinent to the sale. For more information on choosing a solicitor and the role they will play in your transaction, read our Guide to Conveyancing.
You also need to ensure that the Energy Performance Certificate for your property, which contains vital information, is in place prior to the sale. Having an Energy Performance Certificate (EPC) is a legal requirement when selling a property. To get a better understanding of what is included in an EPC, read our Guide to EPCs.
Once you have chosen your desired auctioneer you will need to formally appoint them. In doing so you will enter a legal agreement, allowing your auctioneer to;
The next step is to decide a guide price for the property you wish to sell. This represents the lowest price you will accept for the property prior to the auction, or a range within which a sale price at the auction may be achieved. The guide price is agreed between you and the auctioneer.
A few days before the auction, the auctioneer will contact you again to agree a reserve price. This is a confidential figure agreed between the auctioneer and the seller below which the auctioneer cannot sell the property.
Before the auction you may also need to agree procedures with the auctioneer for each of the following:
When selling property at auction the auction particulars need to be prepared. These include any plans or photos of the property and must be factual and accurate, complying with the Property Misdescriptions Act 1991.
You will also need to liaise with your solicitor to make sure you’ve revealed anything that could affect the sale of the property to the auctioneer - for instance public health notices, local land charges, major arrears of rent or service charge, or disputes.
Once the bidding begins the auctioneer will describe each property in turn. He will then suggest an opening bid and invite prospective buyers to place bids on the property they wish to purchase.
When the highest bid is reached the auctioneer will drop his hammer or 'gavel'. When the hammer comes down it signifies a binding contract, and the auctioneer or clerk will sign and exchange the Memorandum of Sale with the buyer and collect the deposit. The deposit is 10% of the purchase price subject to a minimum charge of £2,000.
The completion date is usually 20 working days from the date of the auction. On completion, the balance of the proceeds of the sale are paid by the purchaser.
For more information about property auctions contact Countrywide Property Auctions. Countrywide Property Auctions are one of the UK's largest regional property auctioneers, holding more than 25 auctions in England, Wales and Scotland each year. To discover how we can help you sell your property at auction, contact our auctions division or call 020 3151 9172.
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