Selling at auction

Selling a property at auction – everything you need to know

If you are looking for a quick sale, or if your property is unconventional, you may find that selling your house at auction is the best way to go. Property auctions are often filled with expert buyers who won’t be put off by a project and will have funds in place from the start.

This step-by-step guide will explain how to auction a house and help you decide whether it is the right option for you.

BEFORE YOU START

1. Is going to auction the best option for your property?

Most types of property can be successful at auction, but there are some types of property that are more suitable than others. Properties in need of renovation, or with unusual layouts or features that could potentially put off your average buyer can do well, this is because house builders and property developers will often make up the attendees.

Another reason for going to auction could be to secure a quick sale. If you sell your property at auction you can expect to complete within 28 days of the gavel falling.

2. Speak with a property auction house.

Use our tool to find a local property auction house who can help you with your house sale. We always recommend using a NAVA Propertymark auctioneer, as they belong to a professional body, abide by a code of practice and are committed to providing a professional service.

3. Understand the costs.

Your auctioneer will be able to give you the specific costs for your property auction, but they will typically consist of an entry fee and commission on the sale price.

The entry fee covers the costs of advertising and marketing your property and can range from a few hundred pounds to over a thousand pounds, depending on the auction house.

For the commission you can expect to pay around 2.5 per cent of the sale price.

GETTING YOUR PROPERTY READY

4. Decide on a reserve price.

The reserve price is the lowest price you are happy to accept for your property. It is kept private between you and the auctioneer and if is met during the auction, your property will be sold to the highest bidder.

Unlike selling a house with an estate agent, you will not have a valuation on the property before the auction, so you will need to decide on a reserve price yourself. For more information on getting the value of your property right, read our house valuation guide.

If your property has already been on the market but has not received any offers at the asking price, this may be an indication that you need to drop your reserve price for the auction.

5. Speak with your auctioneer and decide the guide price.

Unlike the reserve price, which is private, the guide price is out in the open and designed to tempt would-be buyers to bid on your property. It is normally set around the value of what the property is worth but could be set lower to attract more interest.

Your auctioneer is the expert on this and will know how the guide price effects bidding activity. Spend some time with your auctioneer to talk through the options and decide together on the optimum price for your property.

6. Instruct a solicitor.

Just like selling your property the traditional way, it is vital that you instruct a good solicitor when selling a property at auction. Your solicitor will prepare the legal pack and contracts before the big day. Look through our guide for our tips on finding the best solicitor for your circumstances.

7. Prepare your property for marketing.

In the weeks running up to the auction, your auctioneer will visit your property to inspect it and take photographs and videos. They will then look to advertise your property on their website, on property portals, in the local newspapers and in their catalogue.

To help get the most out of any marketing you should try to make your property look its best. Ensuring it is clean, decluttered, and light are a must, but there’s more you can do to really make the property stand out. Our top tips on selling your house goes into more detail.

8. Make sure the auction catalogue is correct.

Before your auctioneer prints the catalogue, they should give you an opportunity to check it over. Have a good look at any imagery and all the accompanying text to ensure there are no mistakes.

9. Do some marketing yourself.

Along with your auctioneers marketing activity, there is lots you can do yourself. Social media is an easy way to reach out to potential buyers, especially local community groups on Facebook. Online classified adverts are also an option, Gumtree is one of the most popular sites. Finally, there’s always the old-fashioned flyer in any nearby notice boards.

AT THE AUCTION

10. Decide if you want to see the action or receive a call.

Some people love the buzz and excitement of an auction house, especially if they are financially invested, but it’s not for everyone. You can always tell your auctioneer that you would prefer to stay clear and receive a call when the auction is over, they will be more than happy to do this.

11. Be prepared to negotiate if the reserve price isn’t met.

Don’t worry if your reserve price isn’t met during the auction, you will still have an opportunity to negotiate with buyers that expressed an interest.

The auctioneer will normally ask any bidders to submit a final offer once the auction has ended. If any of the offers meet the original reserve price, the auctioneer will confirm the sale much the same as during an auction. If none of the offers meet the reserve price, they will then forward the offers onto the seller for consideration.

12. Get ready for a speedy sale.

If your reserve price has been met once the gavel comes down, you have effectively signed a contract with the buyer. At this point there can be no changes or negotiation.

The benefit of selling your house at auction is that it’s quick. The buyer will be asked to give you a 10 per cent deposit on the day and you will receive the remaining amount within 28 days.

During this time, you should prepare for moving day. Our guide has some great advice on how to make it as straightforward as possible.

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