How Do House Auctions Work? The property auction process explained

How Does a house auction work? 7 steps to auction success

A property auction is a structured, legally binding sale method where land or property is sold to the highest bidder, meaning exchange happens on the fall of the gavel with completion typically within 20 working days, making it one of the fastest and most certain routes to sale available in the UK.

Selling at auction has always been popular with homeowners wishing to sell their property as quickly as possible. Auctions offer a high level of certainty that a bid at or above the reserve price will be placed on the day with completion within as little as 20 business days. But how does auctioning a property work? 

You may have some resistance to selling your property by auction simply because you may be unaware of how a property auction works in comparison to a traditional private treaty sale.

In this guide, the property auction specialists at Clive Emson Auctioneers explain the step-by-step process for auctioning land or property so you know exactly what to expect from the moment you decide to auction your asset to the completion date. Request a free appraisal to find out what your property could achieve at auction.

How do property auctions work for sellers?

Step 1: Find a skilled auctioneer with local knowledge

An experienced auctioneer provides guidance and advice as you navigate the auction process, and the first step is to decide which auction house you’d like to work with – auctioneers with regularly scheduled auctions, transparent pricing, high-quality marketing information and previous success in selling similar properties are ideal - everything we offer at Clive Emson! See our testimonials here. 

Next, you work through an appraisal which means an auction valuer assesses the property to discuss whether it is suitable for auction and recommends a guide and reserve price. This may be influenced by a number of factors, such as the local area, the property condition, the potential to add value, the type of property, and other factors.

Step 2: Instruct your auctioneer

If you are happy to proceed, you sign an auction agency agreement provided by the auctioneer, which outlines the terms and conditions under which the property will be sold, as well as other details such as auction fees. You will be required to provide copies of the relevant ID documentation, such as a passport or driving licence along with evidence of your ownership.

The auction house will create draft property particulars, and you can assist with this if there are pieces of information that you think will be important for potential buyers. You can read more about the contents of the property agreement in our guide to selling a house at auction here. 

Once the agreement is signed, the auctioneer can then act on your behalf to market the property and conduct the auction.

Step 3: Instruct a solicitor and progress legal pack

At this point, you’ll be expected to instruct a licensed conveyancer or solicitor to assist with legal matters. Conveyancing is the legal process of transferring property ownership from one party to another, and it involves various legal and administrative tasks.

Your chosen auctioneer will collaborate with your conveyancing solicitors to request the legal documentation required to sell your property at auction.

Working through the formalities is important and ensures any bidder knows that the property legally belongs to the seller and has the appropriate background checks and accompanying paperwork required.

At this stage, a legal pack is prepared. An auction legal pack, also known as an auction pack or legal documentation pack, is a collection of important legal documents and information relating to a property being sold at an auction. The purpose of the legal pack is to provide potential bidders with all the relevant information about the property, allowing them to make informed decisions before participating in the auction.

The legal pack includes information such as:

• Copies of the title deeds.
• Copies of property searches conducted.
• Conditions of sale.

A conveyancing solicitor will help prepare and review these documents in detail, spot any red flags, and advise you on the implications of the information provided.

Step 4 - Agree on a guide and reserve price

Before the marketing begins, a reserve and guide price is agreed with the auctioneer, and they then manage bidder pre-registrations, marketing and listing details.

Guide prices are an indication of what the auctioneer believes the property may sell for and are often perceived by bidders as the starting price. An attractive guide price can drive interest from buyers, whereas competitive bidding frequently means properties sell at auction for considerably more.

Step 5 - Marketing the property

The next step is for the auctioneer to market your property – many have established networks of regular investors, auction buyers or developers keen to source properties with good scope to add value, and they will review:

• The legal pack is available from the auctioneer.
• Online video walk-throughs of the property.
• Access to in-person viewings where possible.
• The guide price included in the listing particulars.
• Property documentation such as energy performance ratings.

A reputable auctioneer is proficient at marketing a property and showcasing all of the features, with auction boards, pre-auction catalogues, website advertising and other methods such as specialist auction newsletters and social media campaigns.

In many cases, the level of interest in the property can influence the reserve price, this will be discussed following a consultation with the auctioneer and the feedback they provide.

Step 6 - Auction day

Once the property auctioneer has handled all administrative duties, the property will be scheduled to go to auction on a specific day.

Bidders may include owner-occupiers, investors, landlords, local developers or those looking for properties with the potential to add their own stamp or renovate, refurbish and redecorate. They can pre-register and verify their identities for security and due diligence purposes and can request copies of documents and the legal pack in advance, so they already have an idea of what they might wish to offer or their maximum bid.

Since the pandemic, the majority of auctions are managed online, although they feature all the essential elements of a conventional auction, with a skilled auctioneer to manage communications between parties.

Now for the auction - the exciting part! Bidders can submit bids online, track the current offer price, review whether the latest offer has exceeded the reserve, or even set an upper limit and, enter bids by proxy up to their top value.

When the auction closes, the highest bid – if it is at or above the reserve – wins, and the buyer pays their deposit. The down payment is normally 10% of the purchase price but could be a fixed value depending on the type of property and sale value agreed.

They usually have 20 working days to remit the remaining balance, at which point the auctioneer will complete the sale.

Related reading: Traditional auction vs online auction: which is best for you?

 

Step 7: Completing an Auction Property Sale

As with any property sale, you will need to continue to work with a solicitor to manage tasks such as recording the change in ownership in the title deeds, and the auctioneer will liaise directly with you and your solicitor or conveyancer and provide the sales memorandum.

Once the balance is paid to the auction house, the funds are transferred to you, less any payable fees and commissions, often via a solicitor, and the keys are handed over to the new owner.

The auctioneer deals with everything from start to finish, but you can participate in the auction by watching the bidding process online, alleviating your nerves and ensuring you know exactly what is happening and whether your reserve price has been met.

How do property auctions work for buyers?

If you're interested in buying a property at auction it's important that you understand the steps involved. Read our guide on buying land and property at auction here.

Before bidding, it is important to review the legal pack carefully, ideally with a solicitor, to understand the property's title, any conditions of sale, and any searches conducted. You should also have your finances in order before auction day, with a deposit of around 10% of the purchase price ready to pay immediately if your bid is successful. To participate, you will need to register with the auction house and provide proof of identity.

If you're looking to speak to an experienced auctioneer about how a property auction works or discuss the steps above in more detail get in touch today with Clive Emson today.

Call us on 0345 8500333, email auctions@cliveemson.co.uk, or contact us online to speak with one of our experienced team.

Sources and References

• Clive Emson Land & Property Auctioneers, auction process information: https://www.cliveemson.co.uk

• RICS (Royal Institution of Chartered Surveyors), accreditation body: https://www.rics.org

• NAVA Propertymark, National Association of Valuers and Auctioneers: https://www.propertymark.co.uk

Frequently Asked Questions

What are the pitfalls of buying a property at auction?

The main pitfall of buying a property at auction is that contracts exchange immediately on the fall of the gavel, meaning you are legally bound to complete the purchase. If you have not reviewed the legal pack carefully with a solicitor beforehand, you may discover issues with the title, conditions of sale, or the property itself after it is too late to withdraw without losing your deposit. It is also important to have your finances fully in place before bidding, as the completion timeline is fixed, typically 20 working days for a traditional auction.

What is the 3-minute rule at auction?

The 3-minute rule is used at some online property auctions to prevent last-minute bid sniping. If a bid is placed in the final moments before the auction closes, the bidding window is extended by three minutes to allow other registered bidders the opportunity to respond. This ensures all parties have a fair chance to participate and that the final sale price reflects genuine competitive interest.

How long does a property auction take from start to completion?

From the point of instructing your auctioneer to completion of the sale, the property auction process typically takes around 6 to 8 weeks in total. Once the hammer falls on auction day, the buyer normally has 20 working days to remit the remaining balance and complete the transaction. At Clive Emson, we conduct eight auctions per year across our five regional offices, so your property can be included in the next available auction date once the appraisal and legal preparation are complete.

Do you have to pay full price for an auction property?

Yes. If your bid is successful at auction, you are required to pay a non-refundable deposit, typically 10% of the purchase price, on the day of the auction. The remaining balance is then due within the agreed completion period, which is normally 20 working days for a traditional auction. Unlike a private treaty sale, there is no opportunity to renegotiate the price after the hammer falls.

Is it worth selling a property at auction?

Selling at auction is worth considering if you want speed, certainty, and transparency. Once the gavel falls, the sale is legally binding, which significantly reduces the risk of a sale falling through after the event. Competitive bidding also means properties frequently sell for more than the guide price when there is strong interest from multiple buyers. Clive Emson, one of the top five UK property auctioneers by volume, specialises in land and residential property auctions across Southern England, with an established network of buyers and investors attending every sale.