How to Sell Your House at Auction

How to sell your house at auction 

There are 7 steps to selling your house at auction. We’ll walk you through each of them now from the initial appraisal right through to completion. 

1. Auction Appraisal. After you’ve made the decision to sell your house at auction you need to choose an auction house. The auction house you choose will do an auction appraisal on your house. They will outline the auction process for you and let you know how much you can expect to sell the property for. They’ll also be able to give you a steer on where you should set the guide price. It’s a good idea to corroborate this by getting a free online house valuation.  
2. Instruction. If you decide to proceed with your chosen auction house you’ll need to give them instruction to sell your house. You’ll need to provide the necessary documentation and certification to sell your house. The auctioneer will then draft up a description of your property for you to approve to sell at auction. 
3. Getting a Legal Pack. Once you’ve instructed the auction house, you’ll need to get the legal pack together. Your solicitor will do this on your behalf. The legal pack will include details such as the title deeds, searches, and so on. 
4. Marketing the property. After instructing the auction house and getting your solicitor to assemble your legal pack, it’s time to start marketing the property. The auction house will take care of this. They’ll put together a listing on their site and market your property on major property portals. They may also use social media and publications to advertise your house. This doesn’t mean that you shouldn’t market your property yourself though, but we’ll cover that a little later on. 
5. Setting a reserve price and guide price. You will agree a guide price and a reserve price with the auction house. The guide price at auction is the price that the public is shown and is usually the starting bid. It can be a good idea to pitch this low to generate buyer demand and create a bidding war. The reserve price is confidential between you and the auction house. It is the lowest price you’re prepared to accept for your property. If all of the bids received at auction are below the reserve price your house will be withdrawn from the auction. 
6. Bidding. As auction day draws closer, prospective bidders will register for the auction so that they can bid on the property. The auction house you choose will conduct checks on these bidders for anti money laundering purposes. Registered bidders will then bid on your property. Usually this bidding starts at the guide price, and the auctioneer will make sure that everyone gets their fair chance to bid. As a seller, auction day can be very nerve wracking. You aren’t under any obligation to attend so if the nerves get too much then don’t worry! You can always check in afterwards to find out how it went. 
7. Completion. Exchange of contracts typically happens immediately after the bid is won. At this point the buyer pays a deposit of 10% of the sale price of the property. They are then given around 28 days to finalise the sale after exchange. The auction house will coordinate completion with you and your solicitor and manage things like handing over keys etc. 

Tips for selling at auction 

Selling at auction is exciting. It’s easy to get caught up in the whirlwind of bidding and forget to do the basic things that will make your auction sale a success. We’ve given you our ten top tips to having a successful auction sale. 

1. 1. Choose your auctioneer carefully. There are many different auctioneers and auction houses in the UK. Some of which are purely auction houses, and some are add on services that are offered by traditional estate agents. Spend time up front to research what properties they’ve sold and what price they’ve managed to achieve for them. Some auction houses will specialise in selling a certain type of house. Such as properties in a state of disrepair, or buy to let houses. Choosing the auction house that is best suited to your property maximises your chances of reaching the best pool of prospective buyers.
   2. Set a realistic guide price. Set the guide price at a level that will stimulate demand. If you set your guide price too high then you risk putting some prospective buyers off. Setting the price low, attracting a large pool of bidders, and then letting them bid the price up between themselves is a great way to achieve a better price for your property. 
   3. Be wary of hidden fees. There is a legal obligation on the auctioneer to explain all of the associated costs and fees at the start of your sale. Look out for any hidden fees in the contract or sliding scale fees that could become expensive. It’s a good idea to read the agreement carefully before instructing any auction house. 
   4. Check out the competition. Once you’ve had your property marketed and listed in the auction catalogue it’s a good idea to look at similar houses that will go in the same auction. Make sure that you set your guide and reserve price competitively. This isn’t something that you’d have to worry about in an online or ‘modern’ auction, but is a consideration when selling your house in a traditional auction. 
   5. Make sure you know the terms inside out. All auction houses operate slightly differently. It’s important that you read the terms and conditions carefully before proceeding to instruct an auction house. This is so that you know the fee structure and how much you can expect to pay, as well as understanding how the auction process will work. 
   6. Are the fees too good to be true? You’ll notice that some auction houses have much lower fees than others. If the fees seem ridiculously low, there’s probably a reason why. Make sure you check the auction house’s history and track record. Some smaller auction houses with a much smaller pool of bidders offer lower fees to try and attract vendors. You might be shooting yourself in the foot if you opt to go for an auction house with very low fees, because you’ll limit the potential demand for your property. 
   7. Check your lot number. Some auction houses run hundreds of lots on auction day. Your lot should appear at peak time, and not too late in the day once most of the bidding is done. The ideal time is during the first half of the session and closer to the start. However this isn’t an issue if you’re using an online auction to sell your house. 
   8. Do your own publicity. Your auctioneer will develop a marketing pack for your property and should list the property on major portals. However, there’s nothing stopping you from sharing the listing on social media and other websites to generate as much demand as possible. Every extra bidder helps!
   9. Keep in mind the fees for pulling out. If you pull out before the auction, some auction houses will charge penalty fees. This will cover the cost of listing your property and handling pre-auction enquiries. Keep this in mind and make sure that you’re absolutely positive you want to go ahead before you opt to sell your house at auction. 
   10. Get insurance. Get property insurance prior to the auction if you don’t already have it. There have been cases where damage has been caused to properties on auction house open days. Make sure your policy covers you against this.

Modern method of auction 

The ‘modern method of auction’ is best described as a hybrid between a traditional property auction and an open market sale. Many agents offer this service as an addition to their core business of selling properties on the market. 

The key difference between a traditional auction and a modern method of auction is twofold. First, unlike traditional auctions, the exchange of contract does not take place immediately once the bid is won. The buyer does however pay a deposit (which is not refundable) which commits them to the sale. It also prevents the vendor from marketing the property to other potential buyers. 

The second difference is that the timelines are longer. There is usually a period from winning the bid until exchange, and then another period from exchange to completion (typically 28 days between each). This allows buyers more time to arrange finances before completing the sale. Because of this, using a modern method of auction widens the audience of prospective buyers. 

Other quick house sale options

People often choose to sell their homes at auction because it’s a method of selling their house quickly to a proceedable buyer. If you’re looking for a quick house sale but aren’t sure if an auction sale is for you then consider a cash house buyer like SmoothSale. We buy any house in any condition, and we buy properties across the UK day in, day out. 

We can buy your house for cash in as little as seven days, and our service is completely fee free. We’ll even provide you with a solicitor and cover your legal fees. Get in touch on 0800 368 8952 or get a cash offer today!

FAQs About Selling Your House at Auction

Q: Can I set a confidential minimum price?
A: Yes, the reserve price allows you to set a confidential minimum price. If bidding doesn’t reach this price, the property may not sell.

Q: Do I have to accept the highest bid?
A: No, if the highest bid doesn’t meet your reserve price, you have the option to negotiate with the highest bidder or relist the property.

Q: What if the bidding exceeds my reserve price?
A: Congratulations! If the bidding surpasses your reserve price, the highest bidder is legally obligated to purchase the property.

Q: Are there any upfront costs for selling at auction?
A: Yes, there are costs associated with auctioning, including marketing expenses and auctioneer fees. These are usually paid upfront or deducted from the sale proceeds.

Q: How long does the auction process take?
A: The auction process can take several weeks, from the initial marketing phase to the closing of the deal.

Q: Can I change my reserve price after the auction starts?
A: No, once the auction starts, you can’t change the reserve price. It’s essential to set a realistic reserve price from the beginning.