Selling at Auction
When time is an important factor in the Sale of Residential or Commercial Property the Auction Room has become the favourite method of disposal. Auctions are also a particularly good forum for Selling Land, whether or not it has any planning permission. A range of different types of purchasers with different goals, gathered together in one room creates the ideal atmosphere to obtain the best price. Recent Auctions have seen some prices go way above Guide Prices in a frenzy of bidding in this very competitive market place. Interest rate falls during 2008-9 seem to have created a boost to enthusiasm since Autumn 2008 and the volume of sales has increased, although yields on Residential Investment Property have softened from their peak in early 2007. The Professional Investor takes a medium to long term view, but Vendors must be realistic in this market when setting Reserve prices.
A traditional Private treaty sale through an Estate Agent usually commences with a period of marketing to find a buyer. A prospective Purchaser makes an offer, then instructs a Solicitor and arranges a Mortgage and maybe has to sell his or her own property prior to being able to proceed. Sometimes this procedure can take months rather than weeks and if the Purchaser, or indeed his/her purchaser, withdraws from the Sale, the whole process has to start again.
An Auction however attracts Buyers who already have Finance in place and who have nothing to Sell in order to buy your Property. Investors, Developers, Property Dealers and Private Purchasers who attend know that when the hammer falls on their Bid they have exchanged contracts and must Complete the Purchase usually within 28 days.
An Exchange of Contracts can usually be achieved within six - eight weeks.
Selecting an Auctioneer
Not every Auction Sale is ideal for your particular property and not every Auction will attract, in volume, the type of purchasers who would provide the competitive atmosphere for you to achieve the highest Sale Price on the day. e.g. A predominantly Commercial Auction Sale would not be the ideal place to offer a Residential Investment and vice versa.
Surveyline can assist you in the selection of an Auctioneer suitable for your particular property. We act as Joint Auctioneers for Established Auction Houses and will help you to select the right Auction location and Auction House.
Testimonial: "On the day of the Auction the tension in our House was almost unbearable and when the call came from the Auctioneer and he mentioned the amount it had made it came as a total shock... You played your part in this fantastic outcome pointing me in the right direction... I would like to thank you very much for that." - Mrs AB - Welling Kent
Reserve Price and Guide Price
It is important to understand the difference between Guide Price and the Reserve.
The Guide Price is published in the Auction Catalogue to give prospective buyers an indication of the level at which they should expect to bid for the property. It is not the minimum price or the maximum price they should expect to pay.
The Reserve Price is fixed between yourself and the Auctioneer and is not published in the catalogue. It is not disclosed to any potential Buyer. It is the Price below which you will not sell your property and the Auctioneer will not let the hammer fall unless this price or more is achieved.
Entering your Property
There is no commission payable to the Auctioneer if your property fails to sell but there is an entry fee which is usually £350 - £450 plus VAT. This pays for an advertisement in the Catalogue and a Lot number will be allocated to your Property. The Auctioneer will then publish and circularise the Catalogues, advertise the Auction extensively and conduct viewings for potential purchasers usually in the four weeks prior to the Auction.
Your Solicitors prepare an Auction Contract with replies to preliminary enquiries and Search results together with a Draft Contract and Evidence of Title (your ownership). If a successful Sale results on the day the usual Auctioneer's commission is payable.