Selling Property at Auction

If you are considering selling your house at auction, you must be prepared to give vacant possession at a fixed date; usually 28 days after the date of the auction. You should therefore have access to alternative accommodation and make arrangements for storage of your furniture and other belongings if needed.

Take a look at the following tips before proceeding with any sale:

1. Prepare well in advance. Your aim is to present the property to as many potential bidders as possible to have every chance of maximising the price to be achieved.
2. Consult a qualified property auctioneer (MRICS/FRICS) who will advise you if your property is suitable to sell at auction. Factors such as the size, type and location of the property will all be important.
3. If the auctioneer considers the property suitable, discuss the procedure and possible sale date. Most auctioneers require vendors to allow at least 4 weeks before the auction date to enable details to be advertised and catalogues to be printed.
4. You should discuss the likely sale price and reserve to be set for the property (the minimum price you are willing to accept). You should make sure that your auctioneer is experienced in the valuation of the type of your property and that you are happy with the advice they have given.
5. Make sure that you have a copy of the auctioneers terms of business, and that you read them carefully.
6. You should also discuss the cost of the sale and the rate of commission charged by the auctioneer. You may be required to pay for other costs, such as special advertising or the printing of a brochure. If your property fails to sell, you may be required to pay certain costs incurred; this should be made clear before the sale.
7. Ask for an estimate of costs detailing expenditure and confirming the limit of your commitment in writing.
8. Instruct a solicitor to act on your behalf, so that necessary legal information can be given to the auctioneer. The solicitor will need to obtain the Title Deeds, which may take up to 2 weeks to be received from some lenders.
9. For most properties, it is usual for the seller to provide Local Authority and Land Registry Searches as part of the Legal Pack. The Special Conditions should be drafted to require the successful bidder to refund these costs on completion of the sale.
10. If you have any other particular requirements in respect of the sale then you should advise your solicitor as soon as possible so that these can be drafted into the Special Conditions. This may include changes to the standard 28 day period between exchange of contracts (the auction date) and completion, or to require the buyer to make a contribution to your costs. However, any unusual or onerous stipulations may have an effect on the price you are able to achieve at auction.
11. It may help your sale if you can provide responses to standard pre-contract enquiries as part of the Legal Pack.
12. As the auction date nears, the auctioneer may discuss with you whether the reserve price should be adjusted to reflect current market conditions for your property and the level of interest shown by viewings.
13. Make sure that both the auctioneer and your solicitor have a contact telephone number at which you can be reached on the day of the auction. This may be important to discuss a potential sale to an under bidder if the property fails to reach the reserve price.
14. The fall of the hammer represents exchange of contracts. The auctioneer is entitled to sell the property at any price that meets (or exceeds) the reserve. You will then be bound to complete the sale.
15. If your property is sold at auction, the auctioneer will sign the contract on your behalf in the saleroom. The 10% deposit will be collected from the buyer, with the remaining 90% required to complete the purchase to be paid within 28 days of the sale.
16. If the reserve is not met, the property may still be sold privately, sometimes immediately after the sale to someone who has expressed an interest at the auction. If you decide to do a private deal outside of the auction, you should make sure that the purchaser is contractually bound before withdrawing the property from the auction. There may still be a liability to pay the auctioneer's fees.
17. The account from the auctioneer for commission and auction expenses will usually be received by your solicitor who will pay it subject to your approval. After paying off other outstanding charges such as your mortgage and solicitor's fees, your solicitor will send you the balance of the payment.