Below we have put together a guide to selling your property at auction.
Are you looking for a speedy sale for your house? Or wanting security that your buyer won’t bail at the last minute? Then selling your property at auction may be an option.
The buyer has to put down a 10% deposit on the day and then has to pay the remainder within 28 days. You may also find that multiple people like your property which could help drive up the price.
Be aware that there are usually 3 costs to consider when selling your property at auctions – commission, entry fees and legal fees. Typically, an auctioneer will ask for 2.5% of the final selling price. If your property sells for £200,000 you should expect to pay a £5,000 fee + VAT.
Auction houses also charge an ‘Entry Fee’ which usually ranges from £500 – £1,000 + VAT. This is to cover the cost of entering the property into the catalogue. On top of that are you usual legal costs, which can range from £750 – £1500 + VAT depending on your solicitor.
If you’re unaware of the property auctioning process we have pieced together this simple guide to help you understand what really happens when your home is put under the hammer!
The First Step: The Consultation
Firstly on our guide to selling your property at an auction. To sell your Norwich property at auction you will need an appraisal first from the auction house. They will tell you if your property is suitable to be sold at auction and how much they think it is worth. This is where you will also discuss setting a reserve price, so the property cannot be sold for below what you need from the sale.
The Second Step: Commission and the Entry Fee
After the first step, you will then be told the commission they’ll take when your property sells. An entry fee will also be due to put your property into the auction catalogue. Even though there is still a chance of your property not selling at auction, you will still be expected to pay these fees upfront.
The Third Step: An Inspection of Your Property
An inspection of your property will be carried out to determine its current condition. Photos and measurements will be taken and these will be used to market your property in the auction catalogue and on their website.
The Fourth Step: Promotion of Your Property
Photos taken during the inspection will be used to advertise the property. This will increase the chances of selling your property at auction. The auction house will report any interest back to you before the day of the auction. The more interest you have, the higher the chances of creating a bidding war between buyers and selling your property for the highest price possible.
The Fifth Step: The Auction Day
The day of the auction can be scary as you don’t know how much you will get for your property or if it will even sell at all. But with good marketing, there should hopefully be lots of people placing bids.
Bids are placed in person, over the phone or online. Once the bids exceed your reserve price you’ll know that you have just sold your property. It’s then just a matter of hoping that multiple people are interested.
The Sixth Step: The Completion of the Sale
Once the hammer is hit, the buyer has to pay a 10% deposit on the property. They then have a legal obligation to pay the 90% left within 28 days. If your property doesn’t sell at auction then it might be time to rethink your selling strategy. Want to sell your house fast? Check out our 10 Tips here.
Summary: Our Guide On Selling Your Property at Auction
For any advice, you can check out our friends at the auction house recommendations or have a read of our Norwich Property News then contact Norwich Home Buyers today. You can reach us on 01603 851837 for a friendly chat.