Most of us sell our homes through an estate agent or privately, but there are certain situations when selling your house at auction could work best. Here's what you need to know.
By Justine Roffey
Tempted to try selling at auction? As the popularity of auctions increase, so do the final selling prices achieved by the various lots. You may also receive an offer before the auction itself, which you can accept, and therefore avoid the hassle of the auction, or reject in the hope of realising a higher price for your house.
If you need to move fast, the turnaround time when selling at auction is usually far shorter than when selling with an estate agent. Typically, you register with an auction house, the auction takes place a month after that, and the sale is completed 28 days after that. Bear in mind, this means you'll need to be in a position to vacate your home just four weeks after the hammer falls.
Placing a property with an estate agent and completing the often lengthy process of finding a buyer, only to find yourself in a chain that breaks down so that you have to start the whole process again, is pretty painful. This is far less likely to happen at a house auction - once a bid is accepted and the gavel falls, you have sold your property and the buyer faces heavy penalties if they can't complete the sale. If the worse does happen, due to lack of finance for example, you keep their 10 per cent deposit, plus they make up the difference if you eventually sell for less than they offered.
All kinds of property can be sold at auction, but some are more common. Disposing of land at auctions is very popular, as is the sale of commercial property. Houses that are not in a great state of repair are also ideal for auctions, as these don't tend to be what estate agents' customers are looking for. Unusual properties that are difficult to value and those that are likely to generate a lot of interest also feature heavily.
When a house is repossessed, selling at auction is a fast and cost-effective way to dispose of the property. Clearly, though, it's not the (now ex-) homeowner who is selling, but the lender who has now taken possession due to a bad debt.
Auctions attract a variety of buyers, traditionally investors and property developers but increasingly those seeking homes, too. Auctions are seen as a great way to snap up an affordable property, which is why they are attracting more and more homebuyers. And while buyers are often in search of a bargain, if there is a lot of interest in yours it could reach a higher price than on the open market. Do bear in mind, though, that it could go the other way and sell for less - at auction, you are limited to a smaller pool of buyers simply because they need to be in a position to pay cash.
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