A residential property expert is giving her top tips for selling at auction following an increase in popularity of the method.
Sarah Barnes, head of Residential Property at regional law firm Napthens, reveals that the number of properties sold via auction has increased recently as both sellers and buyers become aware of its potential merits.
Larger organisations such as housing associations and property investors already buy and sell homes this way, and Sarah reveals that there can be many advantages – but warned there is work which needs to be done up-front to prepare.
Sarah said: “Selling at auction may not be for everyone, but there are distinct benefits for those that decide to give it a go.
“The conveyancing process can be quicker, as the auction may take place a month after a seller has registered, with completion usually around 30 days after the auction date.
“Auctions can attract a variety of buyers, usually in a position to make a cash purchase. If there is a lot of interest, this can help achieve a higher price than on the open market.
“However, it’s important to remember that the proper preparation must be carried out ahead of an auction which can put many people off.”
Sarah explained that the key steps for selling at auction include:
- Check with the auctioneer as to the level of service provided for the fee being paid. For instance, auctioneers will usually show bidders round a property and provide online and telephone bidding. Will they also advertise a property in newspapers and catalogues?
- Decide whether there is to be a reserve price, which means a property cannot be sold for less than the agreed figure.
- Include your lawyer in the process as quickly as possible as they will need to check the auctioneer’s conditions of sale and draft a contract. Disclose relevant information such as title documents, search results and energy performance certificate.
- On the auction day itself contracts are binding on the fall of the gavel, with the buyer instructed to sign the contract and pay a 10 per cent deposit. Completion usually takes 30 days so both the seller and buyer will need to ensure they are ready to proceed.