Should I auction my home or choose another way to sell? This is a question we’re asked frequently at Clive Emson Auctioneers – and we understand why. We know what our sellers want to achieve market value for their property, but also know that price isn’t the only factor when selling a property. This is why property auctions are an attractive proposition for sellers in specific situations. In short, you should consider an auction if:
- You’re looking for speed and certainty
- You have a property with the potential to add value
- You have an unusual property
You’re looking for a fast, transparent sale
Perhaps the number 1 reason to opt for a property auction is that you need to achieve a sale quickly because your personal circumstances have changed, or you would like to finalise a sale to release funds for your next property purchase.
If you receive a bid at, or above your reserve price, an auction sale completes within 20 working days, so if your priority is to achieve a swift transaction, an auction may be for you!
Further to this, the success rate of properties sold at auction is high at around 75% to 80%, meaning that the vast majority of auction properties sell straight away and within a fraction of the time an alternative sale would take.
Another common scenario is where a seller may be eyeing up other investment opportunities and needs a cash injection. Or when a seller is relocating to a different region or country and would find a delayed sale a hindrance to their plans.
The pace and simplicity of an auction, with support from an experienced auctioneer, can make the sale process straightforward and stress-free, and auctioneers can offer advice where sellers need assistance setting a price based on market conditions, their expectations, and likely interest.
You’re selling a property with the potential to add value
Auctions are popular with buyers who may be looking to add value to the property – whether they’re relocating and want to live in the residence as their primary home or are interested in a project where they can add their own stamp or add to their property portfolio.
Lots that attract competitive bids and enhanced levels of interest can achieve significantly higher sale values than the reserve or guide prices, usually because prospective buyers can visualise how they can optimise the space or renovate the property through:
- Adding an extension to utilise unused space around the structure.
- Improving the interior or exterior appearance or extending the home into the loft.
- Converting the property into several units or apartments.
While there are myriad of other ways to improve the market value or secure positive rental yields, most homes that present a good opportunity to add value will sell well at auction.
You have an unusual property or one that requires work
Auctions really come into their own if you’re selling a quirky or interesting property. Less conventional properties achieve great auction sale prices, where they may be considered more challenging to sell elsewhere – including lighthouses, pubs, churches and sites that are prime for renovation or restoration into high-quality homes. We’ve even sold a nuclear bunker (with potential) and a former restaurant!
Some mortgage lenders may be reluctant to lend against a property for countless reasons, meaning that prospective buyers through a conventional private treaty sale may be unable to move forward without financing.
Because properties sold at auction represent an immediate exchange, with the funds reaching the seller within a month, there are no such delays or complications, with most bidders acting as cash buyers.
Scenarios where a property may be tricky to mortgage might include:
- Unusual properties or those requiring remedial works
- Non-standard constructions, such as a property with a thatched roof or timber frame.
- Uninhabitable properties which do not currently have a usable bathroom or kitchen.
- Properties that have been uninhabited for some time.
- Mixed-use or semi-commercial properties, such as a shop or office attached to a flat.
The expedited nature of a property auction attracts cash buyers or bidders with pre-arranged financing, meaning that a residence that requires work or improvements is considerably easier to sell at auction, where buyers look for these opportunities.
Other property types are also well suited to auction sales, such as plots for development and buildings with mixed-used commercial and residential spaces.
So is a property auction right for you?
As we have explored, there are many circumstances where selling at auction can be an attractive solution, based on the types of buyers that are most likely to be interested in making an offer or submitting a bid, the property itself, and your requirements in terms of achieving a brisk sale.
Selling a property at auction provides the assurance of a speedy transaction, where auctioneers market lots to a broad audience of potential buyers, with the certainty of a reserve price to set the minimum you are prepared to accept.
The ability to watch the auction and see the bids being placed first-hand is an assurance that dual owners wish to secure a fast sale in a completely transparent manner. An auction is frequently the ideal option for separated parties who need to sell a jointly owned property with full clarity over the price achieved.
The interested parties in an auction market can differ considerably from other prospective buyers, but the biggest advantage is speed and transparency. Provided you have a bid at or above your reserve price, the sale is confirmed (contracts exchanged) as soon as the gavel falls.
Buyers at auction pay a deposit there and then, with the balance paid normally within 20 working days, assuring the seller of a considerably shorter turnaround than through the private treaty process.
If you are unsure whether your property will perform well at auction, need help establishing a reasonable guide or reserve price, or would like advice about your prospects for securing a sale at a fair value at auction, please contact the property auction experts at Clive Emson Auctioneers at your convenience.
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.