Why Auction A House Instead Of Selling?
Selling a home privately in the UK can prove extremely lengthy and frustrating. Finding an interested buyer, negotiating an acceptable price and working through conveyancing delays test the patience of even the most resilient vendors. Completions can take many months – or years – with the constant risk of buyers pulling out if they fail to sell their properties or secure mortgages.
For those seeking a considerably quicker and less stressful route to market, more UK property sellers now turn to auction houses as the answer.
What Are Property Auctions?
Residential property auctions provide an alternative transaction model to private or estate agent-led sales. Auction houses market properties internationally to attract interest, then conduct live public sales events allowing buyers to openly bid against each other. Legal exchange of contracts takes place instantly when bidding hits pre-agreed vendor reserve prices. Completion dates also get agreed upon within tight defined windows at this point.
For those considering selling a property what unique advantages can the auction room model offer compared to traditional disposal options?
Speed of Sale
The standout benefit auctioning delivers is accelerated sales, with the whole process taking just a matter of weeks from decision to completion. After signing up with a chosen auction house, property lots get promoted during intensive 4-6 week marketing campaigns ahead of firm sale dates. When auction day arrives, competitive bidding whips up extra urgency and incentive for buyers to raise offers – nobody wants to lose out. Contracts get signed and 10% non-refundable deposits are banked the moment the hammer falls. The conclusion then follows within 28-56 days maximum. Simply put, no other sale method comes close to matching this pace of property disposal.
Certainty of Sale
Opting to auction also brings far greater confidence for sellers around deals completing. Whereas approx. 1 in 3 private sales collapse due to mortgage, survey or legal obstacles, auction conditions enforce buyer commitment. Winning bidders exchange binding contracts immediately after sale agreements get struck, backing this with hefty upfront deposits. Buyers must then complete purchases by the early dates defined in sales contracts – or face forfeiting deposits if they withdraw later. By effectively eliminating risks of gazumping and down valuations, auctioning property removes huge uncertainty headaches for stressed vendors.
Maximised Final Sale Prices
Another reason more UK vendors now favour auction houses is enhanced final valuation levels compared to initial price expectations. While achieving the reserve remains the priority, nothing guarantees higher ultimate sales values like open transparent bidding between competing purchasers. Auction fever even occasionally results in homes selling for over-list prices amid spirited bidding wars. For forced sellers requiring quick high certainty disposal, the heightened atmosphere and urgency of the auction room unlocks maximum value.
Wider Market Exposure
Auction houses also access much wider potential buyer markets than traditional channels. The online global promotion sees listings go out to investor mailing lists and portal feeds internationally – reaching far more house hunters than typical estate agent email shots. Come auction day itself, packed function room attendance then allows bids to be taken from the widest possible pool of interested parties. Whether aiming to offload quickly or secure the highest prices, casting the net as wide as possible is key.
Why Do More UK Vendors Now Favour Auctions?
For growing numbers of property sellers across Britain, the unique advantages above make opting for auction disposal over private attempts a no-brainer. With 2021 seeing the highest auction volumes for years, what broader factors are also driving this trend?
Following recent COVID lockdowns and market uncertainty, many now proactively review housing needs afresh while reassessing finances and retirement plans. For some, switching to quicker auction sales with their certainty appeals over sluggish private channels. Whether downsizing, relocating, releasing equity or exiting inherited properties, the slick auction process suits change.
Tax Change Incentives
In recent times, key tax rule changes also incentivise quicker sales for some property owners. Reforms to capital gains tax reliefs from 2020 make disposing of inherited or gifted assets before two years liability thresholds essential. Care home funding reforms drive others to rapidly release equity. For financially driven vendors, auction disposal timescales align better with deadlines.
Growing numbers of executors also dispose of property via auction after bereavements. Shortening timescales to obtain official paperwork to sell deceased estates means auctions better meet lawyers’ requirements. Removing the risks of losing house chain buyers appeals greatly versus the uncertainty of private attempts. Cleanly wrapping up lengthy administration duties gives relief.
Separation & Divorce
Relationship breakdowns often also trigger property disposals as couples divide assets. Minimising time stuck living under the same roof is a top priority here. The 28-day exchange to completion terms auction houses imposes avoid agonising months of waiting around. Removing the risk of gazumping prevents last-minute hitches from scuppering break-up plans too. Again, auction conditions align with emotive needs.
In summary, from bereaved executors and divorcees through to investors and downsizers, more UK property vendors recognise the clear advantages auction houses hold over traditional property sector channels.
What Factors Should Sellers Consider Before Opting for Auction?
Given the many plus points of the auction disposal route, it remains important for vendors to weigh up key considerations beforehand determining if the process best aligns with personal situations, property types and desired objectives:
Primarily, what level of confidence matters most around achieving a sale? For those highly driven by certainty above all else, auctions represent virtually the only route guaranteeing transaction success. Estate agents or private attempts often disappoint after months of effort.
How time-sensitive is offloading the property? Those facing tight deadlines – perhaps due to life stage changes, care needs or tax reliefs – invariably favour auction methods. Moreover, elongating stressful home disposal situations may be deemed unnecessary.
Target Price Expectations
What value expectations exist balancing against speed and certainty priorities? Auctions sometimes secure premiums above market estimates. But equally, closing prices occasionally fall behind wider sales values. Defining acceptable reserve thresholds matters here.
Crucially, auction houses best serve some property types over others. Period buildings often spark investor and developer interest. Quirky properties also attract niche buyers. But very dated or non-conforming homes requiring extensive work may not suit all bidder appetites unless attractively priced.
The Desire For A Public Sale
Additionally, personal preferences around the sales process itself merit thought. Are you comfortable with your property going to public auction with strangers bidding? If unwilling to see homes potentially sell below hopes amid pressure, auctions may feel uncomfortable. There is no hiding at the final gavel fall!
If comfortable with the above factors, however, auctioning property promises vendors far faster, lower hassle sales journeys than almost all private attempts. Removing risks of gazumping or down valuations also provides reassurance for those prioritising certainty. Where personal mindsets align, assign an auction specialist and prepare for a smooth quick ride towards offloading UK property assets.
For the majority of residential property vendors across Britain today, opting to sell homes via professional auction houses promises multiple advantages compared to attempting private unaided sales. Much faster sales journeys, greater completion certainty and maximised ultimate selling prices should be achievable through the competitive bidding process. With leading UK auction houses also offering vendor support around optimal pricing and buyer registration, positive experiences are ensured for those well-prepared. As priorities around faster sales with limited risk continue accelerating across housing markets, expect sheer auction room demand to influence growing numbers of sellers going forward.