In This Guide
choosing an agent
Conveyancing
Holding viewings
Negotiation
Planning your sale
Prepare your home
Seller's Packs
Selling at auction
1. The process
2. Advantages and disadvantages
Selling in Scotland
Selling privately
Selling your home
Using estate agents
Selling at auction
The process
Selling your home at auction is by no means suitable for everyone. Here are some pointers which may give you an idea of whether or not you are at all interested in the idea. If you are, then we suggest you buy the excellent book 'Property auctions' by Clive Carpenter & Susan Harris to find out more about the subject.
Ideally, your property should be in the same ballpark price range as the other properties in the catalogue. If 99% of the properties for sale at the auction are derelict houses in a low value area in need of a lot of work, you are unlike to have much joy selling a substantial Victorian country residence.
The auctioneer will seek to enter into a sole agency agreement with you, as regards the property. This means that they will advertise your home in brochures and catalogues on your behalf. Unfortunately it also means that you are liable for the costs of that advertising, as well as a portion of the room hire fee, regardless of whether you find a buyer for your home. You are unlikely to find an auctioneer who will sell your property on your behalf without such an arrangement.
On top of this, the auctioneer generally charges the seller around 2.5 % commission on the sale. Find out about all of the charges before you get involved, including the abortive costs involved if you don't find a buyer.
Before putting your property up for auction, you should discuss matters with an estate agent or a qualified property auctioneer. Find out what the likely market value of your property will be and get advice as to a good level at which to set the reserve price.
Before the auction, you must instruct your solicitor or conveyancer to prepare a contract and details of any special conditions of the sale. These will be included in the agent's brochure.
You must also make your property available for open viewing from all those prospective buyers who have seen it in the catalogue and may be interested in buying the property. You also have to allow access to surveyors from those people who have viewed the property and wish to further their interest.
Some auctioneers are now pre-empting the government's moves and requiring vendors to put together a seller's information pack. This typically contains an independent survey, property details and other background information. Some of them even require sellers to foot the bill for advance land registry and local authority searches, which are valid for three months from the date on which they are carried out.
When the hammer falls at an auction, it signifies the agreement of a binding contract between buyer and seller. The buyer must pay 10 percent of the total sale price of the property before leaving the auction house. If the buyer fails to pay off the remaining balance within 28 days, you can sue them. You should be able to recoup the difference between the agreed sale price and the amount you eventually sell it for (assuming it is less), plus any expenses and costs that you incur.
Once the auction is complete, you solicitor will take care of the commission and auction expenses, the outstanding mortgage debt, and of course their own fees.
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