Homes under the hammer: Should you be selling at auction?
In 2019 the property market has been slow. More and more property investors are turning to auctions to sell their property. Online agent Purplebricks is now working with two auction houses to take a share in the market, auctioneers McHugh and Co sold 80% of its catalogue at its 30 April 2019 auction and Allsops are listing sale prices of over £1m on more than 30 lots in its 20 May 2019 auction.
Perhaps you too have been thinking about extracting the capital from your property but you can’t face the prospect of it being sat on the market for months or, in some cases, years. Maybe you’ve had sales fall through or seemingly endless enquiries which lead to nothing. Selling at auction could be your answer, but it can be tricky to know where to start.
What happens at auction?
The auction sale process is different to a sale on the open market. The auctioneer acts as agent and markets the property. As the seller you or your solicitor will need to prepare all the documents a buyer wants to see and submit them to the auctioneer in advance, as an auction pack. This means that the majority of the work is done by your solicitor long before the date of the auction. A binding legal contract is formed on the fall of the hammer and no further negotiation can take place. The great advantage of this is that you govern the terms of the deal and it is presented at auction on a “take it or leave it” basis. This also means that you can choose the date of completion. We are all busy people and fortunately you don’t have to attend the auction.
Can my property be sold at auction?
Any property can go into an auction. Auctions are split between residential property (including investment property) and commercial property. You can sell almost any kind of property at auction including offices, retail units, industrial units, student accommodation, ground rents, HMOs, development land or agricultural property. You can sell vacant and tenanted property.
Another reason you might want to look at an auction sale is to sell multiple properties. They can be sold in one go either as one big lot or as multiple lots.
What documents do I need?
The documents you need are the same as an open market sale and will depend on the type of property you are selling. Your solicitor should help you collate all of these when they prepare the auction pack and this will typically include the title, CPSEs, planning and architect documents, tenancies and EPCs. It is common for a seller to provide searches and for the buyer to reimburse the seller for them.
What if it doesn’t sell?
We have dealt with properties selling before the auction and after the auction. It is common for interested parties to put offers in on unsold property after the auction has taken place.
This might be for me..
Auctions can work for all types of properties and can work around you, your life and the commercial needs of your portfolio. When you go to auction properly prepared you have more control of the sale process and peace of mind that if your property has sold, it has really sold. No more enquiries, no more negotiation, no more hassle. So, is it time for you to put your homes under the hammer?