Want to sell your house? Need to sell your house? If a conventional sale is not a great option, whether because of the state of your property or the timeline under which you must move (or any number of other factors), you might consider selling at a house auction in UK.
What are the pros and cons?
Pros of a House Auction UK
You Can Break the Chain
Selling a house on the conventional market is… well, frustrating. One of the biggest obstacles comes from chains. Here, each transaction depends on the success of the one prior. One kink in the works, one break in the chain can set you back significantly. And, of course, it costs you untold time and money.
With an auction, you can sell chain-free. Buyers must have verification of funds so you are confident that if they make the winning bid, they have the financial resources to make the deposit and, in short order, complete the purchase.
You Can Sell Relatively Quickly
If you list your house on the market, you can expect to wait four to six months to sell. That’s the average, but, of course, it can take much longer depending on a variety of circumstances. Chains are one aspect, but there are myriad others to consider. For example, you finally get an offer, but there is an issue discovered at the survey stage. You have to decide if you can address this issue or lower your asking price to keep the buyer onside. If all goes ahead, they may run into issues with their financing (e.g. their income has changed and they no longer qualify). There are any number of obstacles that can crop up along the way, and this can greatly impact your timeline.
With an auction, you will have a guaranteed date of sale. As long as the reserve price (i.e. the minimum at which you can sell) is met, you will be on your way to completion. The buyer has to pay a deposit or reservation fee on the day of the auction and then has a set number of days (usually 28) to purchase the property. This certainly speeds matters up.
You Have a Bit More Security
Auctions do give sellers a bit of control and security during the process. Once a winning bid has been entered and accepted, the buyer cannot walk away from the deal without penalties (for example, they will not get their deposit back and may face legal consequences as well). In terms of a conventional sale, a potential buyer can walk away or renegotiate terms without consequence up until the point that contracts are exchanged.
You Can Create More Interest for Your Property
House auctions have become increasingly popular in the UK and you may be able to attract a different type of buyer – and more of them. Ideally, for you, this could drive up the sale price.
What about potential downsides?
Cons of a House Auction UK
Weigh the cons against the pros:
Price Is Not Guaranteed
Many properties for auction have a minimum reserve price. Below this point, it will not sell. But there is no certainty when it comes to just how much you can sell your house for. The best case scenario is that you spark a bidding war and exceed expectations. But you may be scraping by with the minimum. This can make planning your next financial moves quite difficult.
A Sale Is Not Guaranteed Either
A benefit of an auction is that you have a set date – but you are not guaranteed a sale. There may not be many people at the auction, there may not be a lot of interest in your property, you may be at the end of a long list of other properties that receive more attention, you may not have marketed your house effectively… Whatever the case, you may not sell. It is certainly not promised.
It’s Fast and Furious
Again, the speed is a benefit but it does put you in a time crunch if/when you sell. You need to be out fast, so make sure you have packed, arranged removals and are ready for your next steps.
Sales Are Final
Another positive that can have a downside; you cannot change your mind after the gavel goes down. You need to be completely sure that you want to sell.
Is an auction the right choice for you?
