Understanding what your home might sell for at auction can be complex, but no more so than through any other sales process. That’s because valuations and appraisals are professional estimates, not guarantees, and sellers might receive offers and bids below expectations or competitive bids far higher than anticipated.
The best way to determine what an auctioneer expects your property to sell for is to request an obligation-free appraisal, while noting that bidder interest is dynamic and impossible to predict. However, that doesn’t mean that sellers might need to accept a bid lower than they are comfortable with, and there are options to set reserve pricing to ensure a legally binding sale will only occur when the highest offer is above this threshold.
Key takeaways
- Across the vast range of properties sold at auction, the majority achieve the estimated market value, though this can vary considerably; a good proportion also achieve far more due to competitive bidding.
- Professional auctioneers can compile auction appraisals as an indication, which acts in a similar way to a general valuation and gives a buyer an idea of what they might make, while being subject to variances.
- There are regulated rules in place that direct the setting of guide prices, which protect both sellers and buyers and ensure that published pricing is accurate and fair.
Find out how much your property could sell for at auction
Need help deciding if auction is right for you? Call us on 01622 608400? or fill out our free appraisal form here.
How are auctions properties valued?
There are three prices you need to understand if you’re considering selling a property at auction – the appraisal, guide and reserve price:
Appraisals are the auction-specific equivalent of a valuation and tell you what an experienced auctioneer thinks your home should or will sell for.
Guide prices are published and visible to prospective bidders and typically match the appraisal value unless circumstances have changed in the interim.
Reserve prices are the minimum the seller is prepared to accept and will be in line with the guide price, and they are not disclosed to buyers.
Property auctions are subject to rules enforced by both the Advertising Standards Agency and the Competitors and Markets Authority, which aim to ensure that guide prices – often shown in the particulars when an auction property is marketed – are trustworthy, fair and honest.
In short, guide prices can’t be artificially lowered to attract interest or inflated to give the perception that a property is expected to sell for more.
Related reading: Auction guide prices vs selling price
Aspects of Property Auction Pricing to Consider
With the above in mind, and if you’re hoping to sell a property at auction, you will need to review:
The appraisal value offered by your auctioneer, and whether you are comfortable that this represents an accurate guide price.
Your reserve price – or the minimum you will accept.
The benefit of guide pricing transparency and ensuring reserve prices don’t deviate from this value by a wider margin is that sellers maintain the right to protect themselves from a low-value sale, while buyers can participate with confidence about the seller's expectations.
Related Reading: Selling a property at auction
What will impact how much your property is worth at auction?
Several factors can influence how much your property is worth at auction, including the property’s location, condition, legal pack, tenant status, and the level of buyer demand on the day.
The guide price will also be shaped by how attractive the opportunity looks to investors, developers, landlords, or cash buyers, as well as wider market conditions and how similar properties have recently performed at auction. A well-presented lot with clear information and strong demand will usually achieve a better result than one with uncertainty or added risk.
It would be impossible to give a benchmark idea of likely sales values since these are impacted by numerous factors, as described above; however, as an insight, we’ve run through some of the elements we’ll build in when we appraise a property for potential inclusion in a subsequent auction sale.
The Location of the Auction Property
Location remains a pivotal factor in property valuations and appraisals, as certain areas are in considerable demand, often because they are close to outstanding schools, within city centres with ample amenities, or in prestigious postcodes that command a premium.
Likewise, properties in prime rental areas, such as those close to university campuses, can attract greater interest from landlords and investors who are keen to expand their portfolios within these locations.
The Condition of the Property for Sale at Auction
Auctions feature a diverse mix of properties, which is part of the appeal for buyers, including vacant and renovation projects, newly refurbished lots, commercial buildings, and open land. Auction buyers are often happy to consider properties in all conditions, but this will influence the appraisal.
If, for example, the property needs extensive modernisation, has structural issues, or needs a new roof, this must be disclosed in the particulars and will be incorporated into the appraisal process.
Related reading: Selling a property with structural issues
General Property Market Conditions
Auctions aren’t typically as sensitive to small and very localised market fluctuations, but this can be a factor, where if property prices are rising rapidly, and there are sustained shortages of housing, we see increased demand from buyers who are willing to pay more.
In much the same way, if there are numerous properties available for sale in the immediate area, or prices have slumped, this can mean that selling for slightly less or waiting for the market to pick up could be necessary.
How Your Auction Property Is Marketed
An often overlooked factor is the skill and experience of your auctioneer, and how they advertise your property to engaged buyers and regular auction attendees, because this directly affects how many people hear about your property and have a chance to express interest.
Professional marketing ensures that properties due to be listed in upcoming auctions are seen by as many buyers as possible, including developers and investors who have already purchased similar lots.
Find out how much your property is worth at auction with a free appraisal
While appraisals can be impacted by the mood and competitiveness of the auction on the day, they offer a great starting point to understanding what your property is likely to be worth.
You are welcome to submit an appraisal request via the Clive Emson website or contact your local team to discuss pricing expectations.
