Selling a flat quickly may be a priority for many reasons; perhaps you need to complete an onward purchase transaction to avoid losing out on a dream property, wish to finance an investment property acquisition, or are selling post-separation and would like to finalise a sale as quickly as possible. Have you considered selling a flat by auction?
The good news is that selling a flat by auction is an excellent solution, with fast-tracked sales processes, surefire sales and engaged registered buyers, many of whom actively look for flats to use as rental properties, development opportunities, or to purchase leasehold and freehold ownership, along with owner occupation
Clive Emson Auctioneers explains the differences between selling flats and houses at auction and how to ensure you have the best possible chance of selling your apartment in as little as 20 days.
Looking to find out how much your flat will sell for at auction? Let us know the details of your flat here for a FREE APPRAISAL. We’ll let you know whether it is suitable for auction and provide you with our recommendations for the guide price and reserve price. Get in touch here.
Key Considerations When Selling a Flat
Firstly, we would advise that you read our in-depth guide on selling a house at auction here. Flat auction sales are very much the same as regular auction sales, however, there are some key differences you may need to be aware of, specifically with the documents required for the sale:
- Flats and apartments are normally sold as leasehold properties rather than freehold.
- Bidders will need to be provided with copies of the leasehold agreement, along with other documentation included within the legal pack.
- Information about service charges and maintenance fees payable to the property management company must be disclosed. A copy of the management accounts.
- Prospective buyers will need to know details of the building’s ownership, access and terms of communal areas, any major works required to the property as a whole, and whether there is a tenant’s association or other tenants’ group.
Freehold flats are uncommon but can be a more complex scenario if there is no formal lease agreement specifying which party is responsible for structural repairs and maintenance.
Read our full guide on the documents required to sell your property here.
How Long Does It Take to Sell a Flat in the UK?
Auctions are significantly faster than other ways of selling flats, with most transactions finalised within 20 days of the auction date and the exchange of contracts. Provided you receive one bid at or above your reserve price, the sale is confirmed, with the bidder paying a deposit, usually of 10% there and then.
They normally have 20 working days to remit the full balance, which is transferred to you via your solicitor or conveyancer.
However, there are potential reasons that a flat sold at auction may take slightly longer to complete. While the buyer will remain bound by the contractual auction terms and the deadlines for payment transfers, other external factors can cause delays.
These primarily relate to the freeholder’s authority to transfer the lease.
Can I Sell a Flat With a Short Lease at Auction?
Short leaseholds are normally deemed those with 80 years or less remaining. While residential buyers tend to prefer flats with a long leasehold remaining, with the standard from 99 to 120 years, that isn’t necessarily the case with a some buyers.
The main reason buyers usually find short leaseholds tricky, even if they do not intend to live in the property for a lifetime, is that it can be harder to secure finance against property considered a short lease by the lender.
As the current owner, you could investigate the cost of buying an extension to the lease, but this may not be ideal if you’re keen to proceed quickly!
Auction buyers have no such concerns because they are not as reliant on a mortgage lender to provide the financing to buy the flat.
Buy-to-let investors and property managers are often interested in short leaseholds if they can easily recoup the cost of the property through rental revenues or add value to the property through modernisation to command a higher rental price.
Is It Possible to Sell a Flat at Auction Tenants in situ?
Yes, it is. While not every investor will wish to add a tenanted property to their portfolio, a good proportion will see this as a good option to add to their assets without any need to find a tenant or market the property.
If they intend to use the flat as a rental asset, they might also see this as a favourable acquisition where they can retain the property with a stable income and then renovate or refurbish the flat in the future before marketing it to a new tenant.
However, the type of tenant may affect the ability to get a mortgage or to sell the property. Some tenants may be protected tenants and the rent may not be amended until the tenant or the tenants’ spouse leaves the property. There are buyers for these flats, but the guide price may be impacted. We’ve written a guide on selling a tenanted property by auction here.
What Does It Cost to Sell a Flat at Auction?
There are several fees and costs you should account for before planning your property sale, noting that if the conveyancing is complex, it may mean your solicitor’s fees are slightly higher than for a freehold house.
Read our costs guide If you’re looking to find out how much it costs to sell a property at auction.Â
Some solicitors will charge a standard fixed fee to assist with conveyancing, searches and compiling documentation for your legal pack. In contrast, others will quote based on the hours of legal work they anticipate.
You can read more about hiring a solicitor for your auction sale here.Â
The average legal costs differ considerably from around £250 to £1,500. Still, an Auction specialist and conveyancer may be a better resolution if you want to sell as quickly as possible since they can help expedite the process.
You can also speak to the auctioneer in advance if you’d like support with setting the pricing for your flat – properties sold at auction have a reserve (the minimum the auctioneer will accept) and a guide price (the indicative price shown in the marketing materials).
Looking to find out how much your flat will sell for at auction? Let us know the details of your flat here for a FREE APPRAISAL. We’ll let you know whether it is suitable for auction and provide you with our recommendations for the guide price and reserve price. Get in touch here.
About the Author:
Sam Kinloch
Sam’s career in the dizzy world of property auctions began when he hung up his chainsaw and headed in from the forest. Joining the team in 2003 Sam now sits on the Board of Directors and has been instrumental in the adoption of online auction services. Out of the office you can find him flying around the velodrome or sipping coffee at a local café.