While property auctions have long been regarded as a niche segment of the sector, they have become markedly more popular in recent years, as knowledge of how auctions work, the diversity of properties available for purchase and access to auction-specific financing products have improved. But with the rise in popularity comes an increase in property auction myths and misunderstandings!
There are some common property auction misconceptions, with some assuming that an auction is only an option for ‘problem’ properties, or only accessible to investors and professionals. We’ve collated the most widespread myths to clarify the reality of the property auction world, sharing our insights as a highly experienced, multi-location team of real estate auctioneers who manage the sale and purchase of homes, commercial units, land, and unusual lots.
Key takeaways
- Property auctions aren’t just for ‘problem’ properties - From luxury homes to commercial units and land, auctions now cover a wide range of property types. Many sellers choose auctions for speed, certainty and competitive bidding rather than necessity.
- Auctions are transparent, structured and low-risk - With legal packs available upfront, verified bidders and clear guide prices, both buyers and sellers benefit from a secure and efficient process with no last-minute fall-throughs.
- Auctions are accessible and can achieve strong prices - Anyone can participate, including first-time buyers and well-marketed properties often meet or exceed expectations thanks to competitive bidding and broad exposure to active buyers.
6 Property Auction Misconceptions debunked
1. Property Auctions Only Include Derelict Listings
The number one myth is that auctions are only used as an alternative to a conventional sale when a home cannot be sold elsewhere, either because:
It is derelict or has been vacant for a long time
There are serious structural issues with the home
The location of the building is a security concern
It would be impossible for a buyer to secure a mortgage against the property
Related reading: Can You Get a Mortgage on an Auction Property?
This is simply untrue, and the Clive Emson teams handle sales of everything from business units and industrial warehouses to parcels of land and luxurious homes in prestigious addresses – and every other property type you can imagine!
While it is correct that auctions are a great way to achieve efficient sales for properties that require renovation or reconstruction, this represents just a fraction of the homes and businesses sold in this way – and for many, the choice of an auction is down to speed, certainty and the opportunity to benefit from competitive bidding.
Related reading: Buying a House That Needs Renovation
Related reading: Can you sell a property that has structural issues?
2. Buying or Selling a Property at Auction is High-Risk
Auctions carry minimal risk and are faster and safer than almost any other sales process, because the transparent bidding, clear guide pricing and advance access to the legal pack mean anyone submitting a bid will already have an idea about what the property is expected to fetch and have been able to review the documentation – from title deeds to surveys.
For sellers, auction risks are also almost non-existent because reputable auctioneers verify the identities of every registered bidder before the day and ensure that the vital disclosures and documents buyers require are available for download.
Perhaps the myths around risk are due to the fact that when the auction concludes, the sale is legally binding but this is also positive, with no protracted negotiation, and zero potential for either party to back out of the transaction at the last minute.
3. Selling a Property at Auction Means Accepting Lower Than Market Value
The scope of an auction means we can and do manage the sale of properties with below-market guide pricing but that’s usually because there is a defect or issue with the condition of the property itself.
In many cases, properties that are well marketed before an auction achieve more than the seller had anticipated, which can happen because:
We manage the marketing of your property in advance, ensuring the details are circulated to regular buyers, investors, developers, and landlords you might otherwise not have access to.
Competitive bidding is a regular occurrence, if a property is desirable or there are great ways to add value, buyers will up their maximum bid or compete against each other to secure a property they really want.
Auction appraisals offer an indication of what we’d expect a property to achieve but they aren’t set in stone. There is none of the complexity associated with buyers submitting below-value offers or requesting negotiations or discounts – instead the price they bid is final and the highest offer wins.
While there isn’t a guarantee that every lot sold at auction will attract competitive bidding, this is far from unusual and it’s very normal to see properties reach or exceed the appraisal.
4. Property Auctions Are Not Open to Private Buyers
Auctions are not ringfenced or available to specific buyer demographics. In fact, anyone can register, providing us with some ID documents to ensure we can verify their identity.
Although you must have the funds available to pay the deposit and the balance within around a month, anyone is welcome to participate and we receive enquiries from first-time buyers, DIY enthusiasts and , as well as developers and investors.
5. Buyers Cannot View a Property Being Sold at Auction In-Person
There could be a scenario where an online auction is attended by buyers many miles away who’ve not been able to participate in a viewing or open house. Still, most sellers will ensure there are ample opportunities for potential bidders to see the property firsthand.
Depending on the location and type of property, that could be one-to-one viewings, open houses where anyone is welcome or group viewings where buyers can select a time slot to have a walk around at their leisure.
If there is a situation where viewings aren’t possible for any reason, we’ll look to create detailed videos and image galleries to show the exact condition of the property, supported by surveys and reports.
6. Buying or Selling at a Property Auction is Stressful
The conventional perception of an auction is a live event with a packed room full of bidders, a rapid-fire auctioneer shouting out numbers and bids and the pressure to make a bid or risk losing out to someone else.
This doesn’t apply to online property auctions and the process itself can span a few hours or a day or two, during which time buyers and sellers can see the most recent and highest bids and take their time to decide whether or not they’d like to make an offer.
Professional auctioneers manage each step of the process, and while we encourage anyone to download the legal pack, ensure they are properly registered and research the property beforehand, there is no pressure on the day.
Professional Advice About Buying or Selling a Home at Auction
We hope this has cleared up some of the prevalent misunderstandings about property auctions and demonstrates that a modern, accessible sale is a great option for many buyers and sellers, whether they want a quick turnaround or access to a wider range of property types.
If you have remaining questions, you are welcome to get in touch with any of the Clive Emson Land and Property Auctioneers’ regional teams, who will be happy to assist.
