Selling at auction can be a wise choice when you need a quick sale for a fair price. Unlike traditional estate agent sales that can drag on for months, auctions typically offer much faster and more certain completion timeframes after the hammer falls. Yes, you might get less than market value, but auctions work well for a wide range of sellers, especially ones who need a quick sale.
Often holding a property incurs costs such as council tax, mortgage payments, insurance, and maintenance. So selling fast can actually save money, offsetting any discount you give on price. Auctions also attract serious cash buyers, reducing the risk of sales falling through.
With that in mind, here’s all you need to know about why you might want to auction a house instead of selling it on the traditional property market.
Key differences between auctions and traditional sales
Even if you know what an auction is, you might have a few questions if you’re more used to selling a property via the traditional route and using an estate agent. Here’s what you need to know.
Speed and certainty
Traditional house sales through estate agents typically take three to six months after an offer is received, and often face delays. With auctions, once the hammer falls, buyers must pay a 10% deposit immediately and complete within the timeframe specified, depending on the terms you established with the auction house, when you listed your property.
There’s no gazumping or chain breaking. While buyers can technically still fail to complete after exchange, they forfeit their 10% deposit if they do, which is a strong deterrent. If this rare situation occurs, you can re-enter the property in a future auction.
Marketing and competition
Estate agents market to local buyers looking for ready-to-move-in homes, using both connections and listing the property on portals like Rightmove and Zoopla. Auctions attract mostly investors, developers and cash buyers from across the UK and auction properties can also be found advertised on the portals. The competitive bidding environment of auctions means multiple interested parties can drive up the price.
Different buyer pool
Buyers using an estate agent usually need mortgages and want properties in good condition. Auction buyers tend to pay cash and many will seek properties needing a bit of work or with unusual features. They’re comfortable taking on short leases, sitting tenants or properties requiring major renovation. That’s not to say traditional homes don’t sell via auction, though. In recent years, auctions have grown in popularity as a bonafide way to sell any home.
If a seller at auction wants to attract a wider pool of buyers, they can set a longer completion timeframe of six to eight weeks to appeal to buyers who need time to arrange mortgage financing, not just cash purchasers.
Upfront costs and fees
Estate agents charge commission on completion, usually between 1% and 3%. Auction houses charge entry fees upfront (£400 to £600) whether your property sells or not, plus a similar rate of commission as estate agents, for successful sales. However, the speed and greater certainty of auction sales can make them a more appealing choice for many sellers.
Tip: If you contact Property Rescue, we can assist in auctioning your property so you pay absolutely no commission on your sale. Moreover, you won’t even need to pay for a legal pack unless your house actually sells.
Top reasons to sell a house at auction
There are many reasons why you might choose to sell a property at auction as opposed to instructing an estate agent:
Need a quick sale
Many sellers choose auctions when speed matters more than getting top price. Facing repossession? Inherited a property? Moving abroad? Auctions provide a guaranteed completion timeline that can mean fast cash in the bank.
Having this certainty helps you plan ahead and move on with your life. While a sale isn’t guaranteed at auction, you can relist on a property auction as often as needed, adjusting your reserve price until you hit that sweet spot that has bidders clamouring to buy your property.
Property condition issues
Got a house needing some work? Auctions attract many buyers who specifically look for “problem” properties. Unlike estate agent sales where condition issues put off buyers, auction bidders often prefer homes they can renovate and improve. The same goes for non-standard construction or other non-desirable traits..
Inherited properties
When families inherit homes, auctions offer a straightforward way to liquidate. There’s no emotion involved, and the highest bidder wins. A quick completion can help settle estates faster, and the transparent process means all beneficiaries can see exactly what happened with the sale.
Complex legal situations
Properties with sitting tenants, short leases or title issues often sell better at auction. These complications that might deter regular buyers don’t phase auction purchasers. They understand the risks and rewards, and price their bids accordingly.
Maximising value through competition
While auction properties typically sell below market value, competitive bidding can drive prices up. If multiple buyers want your property, you might get more than expected. The transparent process means everyone can see what others are willing to pay.
How auctions work: the step-by-step process
Selling at auction might seem daunting if you’ve never done it before. But the process is straightforward once you understand how it works. Here’s what happens when you decide to sell your house at auction:
1) Setting your reserve price
Your first big decision is choosing your reserve price, the minimum amount you’ll accept. Set it too high and your property might not sell. Too low and you risk receiving less than you need. The auction house, or your Property Rescue auction concierge will advise on a realistic reserve based on similar properties. It’s in your, and our, interest that your property sells for the maximum price.
2) Marketing period
Once you’ve signed up, your property appears in the auction catalogue and online listings. This gives buyers time to arrange viewings, surveys and finance. The auction house also markets your property to their database of investors and developers who regularly buy at auction.
Legal pack preparation
Your solicitor prepares a legal pack containing searches, title deeds, lease details and other important documents. Buyers’ solicitors will also review these before the auction. Having a complete legal pack ready helps attract serious buyers who can bid confidently.
The Auction
Once the auction starts, people bid against each other. Once bidding reaches your reserve price, the highest bidder wins and must pay a 10% non-refundable deposit immediately. They then have until the agreed completion date (typically 28 days, or 56 days) to pay the remaining 90%.
If they fail to complete, they forfeit their deposit. The deposit is given to the seller (less auction fees), and you can re-auction the property.
If you allow a longer completion period such as 56 days, it can help attract more potential buyers since it allows people who are buying with mortgages to bid.
In many types of auctions, online and offline, the bidding happens in a very short window of time, similar to the style of auction you might have seen depicted on TV where people are raising paddles. In other, more modern online auctions however, there is a much longer window of time spanning several weeks where bidding can occur. This is very similar to an eBay auction.
Myths and truths about auctions
Many people have misconceptions about property auctions, often based on outdated ideas or TV shows. Let’s separate fact from fiction:
“Auctions are just for rundown properties”
Wrong. While auctions work well for properties needing renovation, they sell all types of homes. From luxury apartments to family homes, if priced right and marketed properly, any property can sell well at auction.
“You’ll always get less than market value”
Not necessarily. While auction properties often sell for less than through estate agents, competitive bidding can push prices up. The goal is to set the right reserve price and attract multiple interested buyers. In addition, many sellers save money by selling property faster because owning property often has an operating cost i.e. council tax, maintenance, ground rent (apartments only), insurance, and mortgage payments etc. These payments end as soon as the property is sold.
“Only developers and investors buy at auction”
This used to be true but times have changed. Today’s auctions attract all sorts of buyers, including first-time buyers and families looking for their next home. Online auctions have made the process more accessible to everyone.
“You need cash to buy at auction”
Most auction buyers pay cash, but some use mortgages. Buyers just need to arrange their finances before bidding. The allowed post-purchase completion period set by the seller determines if mortgage buyers can participate.
“Properties that don’t sell at auction are unsellable”
Sometimes properties don’t reach their reserve price at auction. This doesn’t mean they’re unsellable. It usually means the reserve was set too high or the property needs different marketing. Many sellers successfully negotiate with interested buyers after the auction.
Why choose Property Rescue for auctions?
We offer something different from traditional auction houses. Our modern approach combines the speed and certainty of auctions with more flexibility, zero upfront cost, and no auction commission for sellers.
No fees or upfront costs
Unlike auction houses, which charge entry fees regardless of whether your property sells, we don’t charge any fees. We appoint a panel solicitor to prepare the legal pack and an agent to take property photos at no advance cost.
If your property doesn’t sell, there are no fees to pay at all. Only if your property sells successfully through auction will the legal costs plus disbursements be deducted from the completion funds. This approach ensures you have absolutely no risk of spending money without making money.
Set your own timeline
Many traditional / live streamed auctions are over in a few minutes. However, the online auction type that Property Rescue offers allows bidding over many days, which means properties can attract more bids and get a higher price.
Watch the bidding live
With Property Rescue, you’ll see every bid as it happens. There’s no wondering what’s going on behind closed doors. You stay in control and can track interest in your property in real-time. We’ll guide you through the whole process, helping you make informed decisions about accepting offers.
Maximum exposure
Your property appears on all major property websites plus our database of active buyers. This wider reach often leads to more competitive bidding. Plus, our system is open 24/7, so buyers can bid anytime, from anywhere. A wider pool of potential buyers maximises the amount of competitive bidding.
Support throughout
From helping set your reserve price to handling viewings and managing the legal process, we’re here to help. With 30 years’ experience buying and selling properties, we will help get property sold for the highest price possible.
Who should consider auctions?
Auctions work particularly well for certain types of sellers. You might want to think about an auction if you fall into any of these groups:
- Homeowners needing a quick sale due to divorce, relocation, or financial pressure
- People who’ve inherited properties they don’t want to keep
- Landlords with problem tenants or properties needing renovation
- Owners of unusual homes that estate agents struggle to value
- Anyone facing repossession who needs a fast sale
- Sellers who’ve had their property on the market for a long time without success
- Property developers wanting to sell quickly and move onto their next project
- Owners of empty properties attracting high insurance and maintenance costs
Not everyone needs the speed and certainty that auctions provide. But if you want to avoid the uncertainty of traditional sales and don’t mind potentially accepting a marginally lower price, auctions offer a straightforward and fast way to sell. If you’re realistic about your expectations and understand what you might achieve, using an auction can be a great way to sell your property fast.
Getting started with auctioning your property
The first step is getting a realistic idea of what your property might achieve. We offer free, no-obligation valuations to help you understand your options.
Simply get in touch. We’ll discuss your property and situation, explain how our auction process works, and give you our professional view on whether auction is the right choice for you.