What are the pros and cons of selling my home at auction?

How a property auction works

If you want to sell your house or flat through auction, you will contact an auctioneer who will take of listing your property and trying to generate interest in it from potential buyers.

The auctioneer will market your property at an opening minimum bid that can sometimes be set at a level below your preferred sale price, with the goal of attracting more interest on sale day from buyers who hope to get a bargain purchase. The ideal result would be for many buyers to engage in competitive bidding at auction that drives the final price up significantly.

The Homeowners Alliance, an organisation that represents homeowners’ interests, has helpful information on the rights and requirements for buyers involved in auctions, and it notes that the buyer might end up paying far more than the opening guide pride.

Once the auction begins, the auctioneer will announce the property and the opening bid, and then seek bids from people in the room or who are bidding remotely. When the bids eventually stop the auctioneer will bring down their hammer – and as soon as they do this it marks the start of a legally binding commitment by the winning bidder to buy your home.

After the auction is over, both the seller and buyer will exchange the necessary legal paperwork to complete the sale. You’ll set a date for the payment, which is typically 28 days after the auction, and once the contracts are signed and funds paid, your house is sold.

Benefits of selling your home through auction

There are a few benefits of selling your house or flat at auction, including the fact that the auctioneer will handle all the potentially stressful and time-consuming aspects of selling such as listing and marketing your home. If you’re looking for a straightforward way to sell that doesn’t require you to do much work, this could be a good choice.

Auctioning also has the potential for getting you a much higher sale price than you might have expected. This can happen when your house or flat is very attractive to many bidders and they engage in competitive bidding that drives the final sale price up.

And another benefit is that auctions always happen on a schedule, so you’ll know that auction day is the exact day your home will sell. This can be a great choice for selling your home in the event that you need to find a buyer for your house or flat in a hurry.

Cons of selling your home through auction

There are a number of negative aspects of auctioning your home for sale, including the fact that you will have to pay the auctioneer fees for handling the sale on your behalf. If you are hoping to make the most money possible from selling your house or flat, auctioning might not be a good choice because you’ll have to deduct the auctioneers’ fees from your final sale price.

Another negative aspect of auctioning your property is that you are not guaranteed to make more than the opening minimum bid. These are usually set at price levels perhaps lower than you’d like to get for your home, in order to generate interest in the property. But if you only receive the low starting bid that might be less money than you might need from the sale, so if financial concerns are your main reason for selling, you might not want to try an auction.