Frequently Asked Questions On How To Sell Houses At Auctions
For the past 2 weeks, I’ve been sharing with you some tips on how to buy at auctions. I got so much positive feedback from this topic, I decided to turn the tables and answer some frequently asked questions about how to sell property at auctions.
Before we start the Q&A, though, here are a few tidbits about property auctions in the UK. Once your house is sold at an auction, it will only take 28 days to complete the sale. That’s why you have to be ready to move out quickly after the sale is finalised. It’s also mandatory in all auctions that buyers pay 10 per cent deposit after the hammer falls and the rest of the selling price to be paid a month after.
Now that you know these basic facts, here are your much awaited FAQs:
Who can sell at an auction?
Anyone can sell their house at auctions. In fact, many homeowners prefer to sell this way, because it’s fast and won’t attract buyers that may just back out after a few days.
Selling at an auction is perfect for home owners planning to move out as soon as possible. It’s also a recommended platform for selling unusual or rundown property, since the buyers who attend these events are property experts or investors who are looking for a house to flip or renovate.
Will it cost me money to auction my house?
Sellers have to pay the auctioneer or the auction house a 2.5 per cent cut out of the payment they get. Additional costs like advertising costs and legal costs are also expected costs whenever you sell at an auction. Rate of these costs vary depending on the popularity and reputation of the auction house you are working with.
What should I do before the auction?
Don’t rely on your auctioneer to do all the marketing work for you! Do your share in making sure that the right buyers attend your house’s auction. Tell your family, friends, and social media contacts about this event. Otherwise you’ll end up empty handed on auction day.
Make sure that your house is always available for a viewing in the weeks leading up to auction day. This gives the prospective buyers enough time to inspect and assess your property.
How do I set the reserve price?
For the newbies, the reserve price is the lowest price you are going to accept, so when the bids at auction day won’t meet your reserve price, the auctioneer will pull out your property for that day’s auction. If someone offers a bid at your reserve price or even higher, that’s when the auctioneer will drop the hammer and the sale is consummated.
You can also use the public’s reaction to gauge whether you’re setting a realistic price or not for your property. An unrealistic reserve price is a common turn off for most buyers at auctions, since they are buying at auctions to purchase property at bargain prices. If you’re really confused about correct pricing, you can always ask your auctioneer for advice.
There’ll be more tips about buying, selling, and renting in store for you next time, so make sure to watch out for the next post!