An auction sale is a quick sale, you need money quickly.
There are a variety of further reasons for auction sale:
- Quick Sale
- Selling Tough Properties.
As buyers bid against each other at an auction their action will probably hike up the value of your property. However, you need to be aware of what is happening to prevent the auctioneer from taking advantage.
Why You Should Sell At Auction
If you need to sell your home real fast with the assurance that a buyer will honestly commit to the purchase, then your best option are auctions. Once a decision is made the buyers 10% deposit has to be paid upfront and the remaining 90% must be paid within 30 days.
Auction Houses are the place in which buyers will gather. Once there are several buyers, the price will undoubtedly rise, especially when all the buyers are in the room. Every buyer is eyeing your property, each hoping to get a chance of owning it.
There are two main reasons for why auctions are a good option for sales:
- Quick Money Focus – Selling your property quickly
- Tricky Property Sale Focus – Selling a difficult property
Once there are several buyers, the price will undoubtedly rise, especially when all the buyers are in the room. Every buyer is eyeing your property, each hoping to get a chance of owning it.
If your property looks broken-down or it’s unusual then its likely you won’t be able to attract conventional buyers. However, auctions are ideal since many skilled buyers are found there. Clearly, these buyers have a knowledge of the market and will understand the true worth of your property.
If you need to get your property off your hands quickly because you’re relocating to another area or you’re urgently in need of money, then choose an auction. With the combination of a realistic price and plenty interested buyers, your property will be off your hands as soon as the auction is completed.
Fees To Expect Whilst Selling At Auction
The auctioneer’s fee is 2.5% of the total cost of the property. In addition, there may be advertising fee, but you’ll have to ask about this.
Hiring a solicitor to handle the legal aspects is a must before you sell your property at the auction. Since attorneys’ fees differ, you’ll need to search around to find an affordable price along with great service.
What You Should Look For When Selecting An Auction House
There are multiple questions that need to answered when choosing an auction house to represent you and your property. It is not like choosing an estate agent where you can have multiple representations and can turn down offers, you have to choose the right auction house to maximise your shot.
Below are a few questions that need to be asked:
Can I rely on the auction house to publicise your property adequately?
Check out the advertisements the auction house has on other properties. you need to ensure that your property is getting visibility or can get visibility.
Should I list with a recognised auction house?
Although it may be more expensive to choose a recognised auction house, the actual gain is more to your benefit. Why? It knows how to advertise your property to the largest number of buyers. More potential buyers interested, more potential bids, higher property sale.
Should I list with an unrecognised auction house?
Sometimes less recognised companies are more helpful and affordable. Research this thoroughly before deciding. If it works out, you can have a cheaper more affordable ‘agent’ working for you and have a good listing and sale experience.
Should You Accept Offers Before The Auction?
Deciding to sell with an auctioneer means that you have already paid the required fees. Therefore, Should You Accept Offers Before The Auction?
You should know that a buyer who wants to buy your house before it goes to auction is interested in owning it, therefore, has no need to be persuaded. Let the buyer go to the auction and bid with the other interested buyers.
There are some possible reasons why this buyer approached you. Maybe he/she is aware of something you’re unaware of. Besides, putting your house on auction will give you a better idea of its value.
You Don’t Have To Be Pressured To Use An Auction House
Using an auction house is up to you. Never allow anyone to pressure you. If this happens talk to your solicitor. only sign up to use the services if you are comfortable with the auction house process and also their ability to serve you on the property sale.
Once you have signed up to the auction and committed to selling at the auction. Selling on auction is final. This is legal and binding and will require you signing and exchanging contracts. There’s is no way you can change your mind once the hammer falls. You can have a reserve price to protect you, but beyond that if the property is being bid on and sold you have to commit.
How You Set A Reservation Price
The reserve is the lowest cost a seller will accept. The reserve cost is private and is known only by buyer and auctioneer. If every offer is less than the reserve, the auctioneer will pull your property from the auction.
Here again you need to be cautious, because if a buyer offers a reserve price or a price above it and the hammer falls, the deal is done. You can’t change your mind, so think carefully before you go to auction with your property
If your house has been on the market for a while and you’re not receiving any offers, it could be that you have set an unrealistic price. Reconsider your price and probably you need to set a lower price before you go to auction.
It’s no big deal if you realise your reserve is a little too high. You can revisit and lower your reserve a bit, and discuss this with a purchaser after the auction.
How You Set The Guide Price
Your guide price is what you reveal to the public. This is what is used to entice buyers and it gives an idea of the value of your house. The auctioneer can assist you in setting a guide price. Even if you set the guide price lower than your reserve, there’s no law saying that you have to accept it.
Other To Dos Before An Auction
Although its the responsibility of the auction house to market your house effectively, you cannot leave everything up to your agents. The only way you can get the right price for your property is if the right buyers are in the room on the auction day.
Make sure that you do your part in:
- Property Presentation
- Personal Property Promotion
Your responsibility is to ensure your property is in “tip-top” condition and open for viewing by potential buyers weeks before the auction.
Ensure it is in the best possible state that you can leave it, particularly if there are viewings.
Note: your don’t need to invest in making it presentable as you are trying to get rid of the property, just be conscious that impressions may be made when the property is visited.
It’s also your responsibility to advertise your property. Talk to you family and friends. Use social media to get the word out. In doing this you’re informing as many prospective buyers as possible.
again the auctioneer will be promoting, but if you can do some of your own the more promotion the better.
How Quick Is Completion After The Auction Sale?
Auctioning your home is quick and can be done in about four weeks. Likewise, the sale can be done within a month as well. Therefore, you’ll need to be ready to move out as quickly as possible once the sale is done.
The Modern Method Of Auction (Selling)
Recently, there has been a new type of auction, popularly known as the modern method of auction. Some real estate agents use this method because it allows for online bidding on the property by buyers and the buyer pays a reservation fee that is not refundable. This allows the buyer a longer timescale for completion and time to select mortgage financing.
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