Selling Your House At Auction - Advantages and Disadvantages


Advantages
  • The most obvious and probably the best advantage when selling your home via auction is the possibility of a bidding war, if two or more buyers decide they really want your property, a bidding war can start, and you may well end up with a much higher selling price than you expect.
  • Transaction speed – most of the work is carried out before the auction, once the hammer falls, the sale is virtually complete, you can even exchange contracts on the same day, and within 28 days the transaction will be fully complete. If the buyer is equally keen to buy the house as you are to sell it then this may happen within a matter of days.
There are certain types of property that are best sold at auction, these include:
  • Repossessed homes, ones that require a very quick sale to repay there previous owners debts.
  • Unique houses that may fetch a higher price than a standard one will not see full benefit of standard traditional selling.
  • Any property that is very high demand.
  • Properties that cant find a buyer through standard means. For instance, one that is in very poor condition, or is in need of major repairs, these will be more suited to property investors, which can usually be found at auction houses rather than estate agents.
Disadvantages
An auction invades your privacy much more in the pre auction stage, as you are obliged to allow potential buyers to view your home, as well allowing surveyors. You may find in the weeks running up the auction, if your house is popular, that it will become overrun with people.

It isn’t a good idea to commit your self to buying another house until the auction is finished, as you never know what price you are going to get. As the market conditions are decided there on the spot, you may get a much lower price than you expected, but your ability to set a reserve price will help with this, but set it too high, and you may not sell. There are no guarantees of selling, and you will have to pay for the lot any way (see the costs section).

Your solicitor will need to be present at the auction, to answer any questions about the property, and conduct the signing of the contracts. This is likely to be expensive, as you will have to pay for there time, and there travelling costs (don’t expect them to travel 2nd class).

Selling your house at auction is more expensive than using an estate agent. And don’t forget, there will be costs regardless whether you sell or not.

The last point can be an advantage or disadvantage, depending on your current situation and what you want. You must be ready to get out of the house within 28 days.

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