Selling your house at auction can be a great way to get a quick sale. Properties at auction often sell much faster than through estate agents. Property sales complete faster too after contracts are signed. But before you commit, you’ll need to understand how auctions work, the costs involved and, most importantly, whether it’s the right choice for your situation.
Here’s what you need to know about auctioning your property.
What does it mean to auction a house?
A property auction is quite different from selling through an estate agent. Your house goes up for sale for a set amount of time in an environment full of competing buyers who bid against each other. The highest bidder wins and pays a 10% deposit immediately. The sale becomes legally binding right there. That means there’s no pulling out or price negotiations afterward. If the buyer does pull out, they forfeit their deposit to the seller and the auction house.
This bidding process can take place over a few minutes in certain types of auctions, or it can happen over a number of days or even weeks in other types of auctions.
Benefits of selling your house at auction
Auctions offer several advantages over traditional estate agent sales, particularly if you need a quick sale. The competitive nature of auctions can drive up prices, and if your property sells, it will do so within a relatively short timeframe. There’s no waiting around for buyers to get mortgages or hoping chains don’t break.
- Sales typically complete within 28 days to 6 weeks of the auction
- Much lower risk of sales falling through compared to traditional methods, as buyers must pay a non-refundable deposit at exchange
- Competitive bidding can push prices higher
- No lengthy price negotiations or chain delays
- Multiple buyers view and bid at the same time
- Serious buyers come ready with finances in place
- Deposit paid immediately by the winner of the auctioned property
The speed and certainty of an auction sale is a major benefit. When the sale is made, contracts are exchanged immediately and the buyer must pay a 10% deposit. They forfeit their deposit if they fail to complete, which creates a strong financial incentive to follow through, making auction sales generally much more reliable than traditional methods.
Preparing to auction your house
Before your property goes under the hammer, there’s important legal work to complete. Good preparation increases your chances of a successful sale and helps avoid any last-minute problems that could put off potential buyers.
Step 1: Choose the right auction house
Picking your auction house is one of your most important decisions. Look at their recent results, success rates and buyer database. Get quotes from several companies, as fees vary, from 2% to 3% commission plus entry fees around £300 to £400. Ask about their marketing plans and whether bidding will happen over a few minutes or a number of days. The longer the bidding period the greater number of bids the property may attract.
Tip: If you contact Property Rescue, we can assist in auctioning your property so you pay absolutely no fees on your sale. In addition, with us, you only pay for a legal pack if your property actually sells. In other words – no sale means nothing to pay.
Step 2: Work out the costs
You’ll need to budget for several auction costs. Entry fees range from £200 to £400 to list in the auction. Marketing packages can cost between £300 and £1,500. The auction house typically takes commission of 2-3% plus VAT. Legal pack preparation runs £500 to £1,000, and you’ll need an Energy Performance Certificate for £60 to £120.
With Property Rescue, you pay no upfront costs. If your property sells, only then would competitive legal costs and disbursements be deducted from the completion funds. If your property doesn’t sell, you pay nothing. In addition, if you choose Property Rescue, the commission is charged to the buyer, so you pay nothing.
Step 3: Set your reserve price
Your reserve price is the minimum you’ll accept. If the bidding doesn’t reach this level, your property won’t sell. Work with your auctioneer to set a realistic reserve based on similar properties. They’ll also set a guide price, usually 10% below the reserve, to attract interest.
Step 4: Get your legal pack ready
Your solicitor needs to prepare a legal pack containing title deeds, property information forms, local authority searches, and any lease documents or planning permissions. You’ll also need an Energy Performance Certificate. Make sure your legal pack is thorough and accurate, as buyers’ solicitors will check it carefully before bidding.
How Property Rescue differs from traditional auctions
At Property Rescue, we offer several advantages over standard auction houses. You won’t pay any commission or entry fees, and there are no upfront costs for legal pack preparation. Legal costs are only deducted if and when your property sells successfully.
Our process gives you more control too. You can watch bids come in live, accept early offers or close the auction early if you wish. The sale timeline is flexible to match your needs, and with a guaranteed buyer deposit system, our fall-through rate stays under 1%. We partner with established auction houses who market properties widely on major UK auction portals.
What to expect during the auction
The auction process starts well before the actual auction. You’ll need to work closely with your auction house to make sure your property gets maximum exposure to potential buyers. Understanding each stage helps you prepare properly and increases your chances of a successful sale. However, if you’ve got Property Rescue on your side, your auction concierge will handle everything for you so you don’t need to stress.
Marketing your property
Your auction house will promote your property for around four to six weeks before the auction. They’ll create a detailed listing with photos and floor plans, advertise in their auction catalogue, and list it on major property websites. They’ll also arrange viewings and open houses where multiple buyers can view before auction day.
The auction
Each property takes about three to five minutes to sell via a physical (live-streamed) auction – it’s usually over before you know it. The auctioneer starts at the opening price and buyers bid by raising their hands or bidding paddles. Online buyers can bid through live-streaming platforms or place telephone bids. The price rises until no one wants to bid higher.
With online auctions, the format can vary. Some are ‘countdown auctions’ where bidding occurs within a specific timeframe (often a two-hour window), with automatic time extensions when last-minute bids come in. Many of these auctions prevent ‘sniping’ (last-second bidding) by using a countdown format – with automatic time extensions triggered by late bids.
Alternatively, other formats span several days or even weeks, giving bidders ample opportunity to discover the property and get involved. This format is similar to what eBay uses and is called ‘Modern Method of Auction’. Typically, this method allows for a greater number of interested bidders, and thus results in a higher final price. Modern Method of Auction is what Property Rescue uses, so get in touch if interested in this.
Post-auction steps
Once the hammer falls, the buyer pays their 10% deposit and signs contracts immediately. They typically have 28 or 56 days to complete the purchase. If they fail to complete, they forfeit their deposit, and you can re-auction the property. However, this happens far less frequently than fall-throughs in traditional sales, which are around 28%.
Get started with Property Rescue today
With no sales fees and no upfront costs, you only pay for legal work if your property successfully sells. Our 30 years of experience means we know exactly how to get you the best price in the fastest time.
Ready to sell your property at auction? It’s easy to get started. Contact Property Rescue now. Our expert team is ready to answer all your questions and guide you through every step of selling your home at auction.
Common misconceptions about auctions
“Auctions are only for problem properties”
Many people believe auctions only sell run-down houses or repossessions. Actually, all types of properties do well at auction, from family homes to luxury apartments. Sellers often choose auctions because they want a quick sale for a fair price.
“You’ll always get less money at auction”
While it’s true that auction properties typically sell for 10% to 15% below market value, your reserve price protects you from selling too low. Since you are the one who decides the reserve price, you are in full control. Plus, when you factor in the cost savings gained from a quick sale such as ending hefty mortgage payments and property maintenance costs, then that 10 to 15 percent might not be such a big deal.
For example if you sell via an estate agent, the complete marketing and sale process might take about 6 months. That’s 6 months of mortgage and maintenance costs you need to pay, on top of estate agent fees for the sale. And what’s even more worrying is that around 28% of all estate agent sales fall through, which resets the sales process back to square one, adding another 6 months to the timeframe. With auctions, less than 1% of buyers pull out after the auction ends because pulling out means the buyer loses their deposit.