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One way to sell a house or flat is doing so at an auction, where people can place bids on your property and you hope to end up with a decent profit thanks to a final sale price. But there are certain complications involved with selling this way that discourage some homeowners, so you should be aware of other ways to sell that might be quicker and result in a better offer.
- What are the steps involved with selling at a property auction?
- Pros and cons of selling your home through an auction
- What are the alternative methods for selling a property?
- Deciding to sell your home with an estate agent
- Trying to sell your property without any assistance
- Selling your house or flat to a quick property buyer
- Frequently asked questions about alternatives to using a property auction
What are the steps involved with selling at a property auction?
Whether you own a house, flat or other type of property and regardless of whether it’s freehold or leasehold, one of the most crucial choices that you will make as an owner is deciding on which method to use for finding a buyer once you decide to sell your home.
There are four typical methods for selling a property, and these are doing so via an auction, selling with an estate agent, selling without any third-party help or selling to a quick buyer like LDN Properties. And the process for each option is unique, with individual advantages and disadvantages that this guide describes – and that you should learn before choosing one.
Before describing the ins and outs of the alternatives to auctioning your home, it can be useful to first understand exactly what’s involved with selling your property via an auction.
With a property auction, the auctioneer will first develop a listing that describes your property and includes photographs of the inside and outside. They will then advertise this listing online and elsewhere in order to generate interest from buyers ahead of the auction taking place. This part of the process can take at least many weeks but might last even longer.
Many auctioneers will also recommend that you agree to viewings of your property, typically on a set number of days when people that might be interested in making an offer on the home get a chance to inspect the inside and outside before deciding whether to bid at the auction. Homeowners often report that they find such viewings time-consuming and intrusive.
Then the auction will be held on a set day and time, when people will have a small window of time to place bids of increasing value on your property, until the auctioneer says the classic phrase “going, going, gone” and bangs their gavel, officially ending the auction. The top bid at the moment that happens is the winner of the auction and the person buying your home.
When you decide to sell this way, the auctioneer will ask you to choose a reserve price. This is the lowest price at which you agree to sell your home, and if you get just one bid at this price then this is deemed a binding legal agreement to sell your property, and the buyer could sue you to enforce the sale in the even that you try to abandon it after the auction.
That’s why you must select a reserve price that should generate a profit from the sale, even after you have paid the auctioneer their commission, otherwise you risk either selling at a loss or selling breakeven compared to what you paid for the home. Typically, an auctioneer will charge 2.5 percent of the property’s final sale price, although this fee could be higher or lower.
Following a successful auction, the buyer will then usually have about 28 days to sign all of the mandatory paperwork and finish their other steps in order to formalise the sale. Although some auctioneers may set a shorter deadline, be aware that others might allow even more than 28 days, which could result in even further delays when you’re trying to sell your home.
You may be asked whether you would like to use the modern method for selling your home at the auction, or the alternative method, and there are some important differences between the two.
The modern method involves advertising your listing for a specific number of weeks or more, during which time people can place bids of ever-increasing value, 24 hours a day, seven days a week, with the top bid at the time the listing expires being deemed the winner. The traditional method involves advertising the listing and an auction date, and the on the date of the auction people will have a small window of time in which they can place bids on your property.
Pros and cons of selling your home through an auction
Property auctions remain popular for some homeowners, especially those that inherit properties that they do not want to keep, as Sold.co.uk notes. And that’s understandable because there are a number of possible benefits you might experience when selling this way.
Less work for the seller: Because the auctioneer will handle all of the key tasks required for finding a buyer for your property, this means there won’t be much for you to do. This can be a great relief for certain homeowners who want to reduce their workload when selling.
Higher sale prices are possible: Although auctioning your home is a gamble, because you don’t know if you will even get any bids on it, or you may only get a bid at the reserve price, depending on the property and auction you might get a higher price than via other methods.
But there are also some notable cons linked with selling at an auction that might add to your expenses, delay a sale or otherwise cause problems that you would prefer to involve. You should understand these hurdles before making a decision on how to sell your home.
Slow selling time: This won’t be a quick way to sell your property because it can take at least many weeks, but more likely several months, before completing the sale of the home.
Having to pay commission: If your property manages to sell at the auction, you will then have the to pay the auctioneer their commission, and this will increase your overall selling expenses because the fee is taken out of the eventual sale proceeds right away.
Potential for viewings: For those homeowners who are strongly opposed to having many viewings when selling a property, this is also not a great method for selling because the auctioneer might insist that you agree to some type of viewings for people to tour the home.
What are the alternative methods for selling a property?
Given the sometimes significant drawbacks of using an auction to sell a home, you might be interested in learning what other strategies are available for finding a buyer. There are three main different choices, as Rightmove notes, and they vary in terms of their length, cost and other factors.
Estate agent: With this approach, the estate agent handles most of the work involved with finding a buyer and your property will be advertised openly on the market.
Selling alone: Similar to selling via an estate agent as you’ll be advertising your home for sale publicly, but you will be responsible solely for taking care of all of the key steps.
Quick buyer: This allows you to sell privately without going on the market because you can just contact a quick buyer like LDN Properties and they will make an offer on your home.
All three of these methods have their own pros and cons, as described in greater detail later in this guide. One way to find the best match for your unique selling situation can be to write down your main aims with selling, which includes your ideal selling price, how long you can wait to sell and whether you are willing to pay any commission for the sale of your property.
Next, you should compare these crucial facts against the specific information about all three selling options below, and this should help identify the one that suits your needs, for example if you desire to sell your home as fast as possible or if you would like to not pay commission.
Deciding to sell your home with an estate agent
The traditional option of selling your property through an estate agent means that they will be responsible for the main tasks with finding a buyer, starting with producing a listing and advertising this online, in local newspapers and in their office. They will also organise viewings for people to tour your home, and they’ll field serious offers from buyers, along with hopefully overseeing the final step of converting a genuine offer to the exchange of contracts.
Not having to do any of this work can be a great stress relief for some homeowners that would rather have someone else handle all the steps until they get an offer on their property.
But estate agents charge commission for this work, as Avocado Property notes, and this will add to your overall expenses when selling your flat or house.
The average estate agent should charge you anywhere between 1.15 percent and 1.40 percent of your property’s final sale price, although the fee might be outside this range. This will inevitably increase your selling costs because the fee is deducted from the sale proceeds. If you want to reduce your expenses when selling then this will not be the most suitable choice.
Selling with an estate agent can also take a long time and you should not be surprised if it takes many months, or even more than an entire year, before you can find a buyer. Even then, someone may make an offer but later rescind it – and they can do so without any penalty so long as contracts have not yet been exchanged. This will delay a sale even further because you will have to start over with deciding on a process for trying to secure a buyer.
Be aware that some estate agents may tell you they can get a very impressive price for your property even when they secretly know that buyers will only make offers at much lower values. This is to trick you into selling with them, so that the estate agent makes money off the commission they’ll charge on the sale.
You can prevent falling for this trick by first looking at online property sales websites and writing down the present and past sale prices of homes like yours. Then you should ask several estate agents to give you no-obligation free quote sale prices for your home. Finally, calculate the average of all these prices to get a better rough estimate of your property’s sale value.
Trying to sell your property without any assistance
Selling your house or flat to a quick property buyer
The third alternative to selling your home at an auction is to get in touch with a quick property buyer like LDN Properties. These companies make competitive and speedy offers to buy a wide range of freehold and leasehold homes, and are usually the fastest way to sell a home.
That’s because quick buyers don’t need to wait weeks or more to get authorised for a mortgage to afford purchasing your property, as they have the funds available to buy it immediately. This cuts the typical schedule for selling a house or flat this way down to just a few short weeks.
Another great reason for selling to a quick buyer is that the honest companies will never make a homeowner pay any commission when purchasing their property, which helps lower your selling costs. It compares very favourably to selling through an auction or with an estate agent, because they both charge fees that will be subtracted immediately from the sale proceeds.
Quick buyers are renowned for giving owners fast and fair offers to buy practically any home, no matter its age, condition, location, shape, size or type. So even if you have a so-called problem property with structural damage or another flaw, you’ll still be able to get a good offer.
LDN Properties started buying homes throughout the UK in 2003, and some of its many wide-ranging purchases and offers made include flats near traffic junctions, houses with old or faulty wiring, Laing Easiform properties, inherited retirement homes, flats that have dry rot, houses of multiple occupancy, properties that have a regulated tenancy, homes with increased levels of radon, flats with cladding, houses with problem neighbours, property portfolios, flats that have very short leases remaining, hoarder’s houses, smoker’s homes, and many other different scenarios.
Selling this way is simple, and it begins when you contact the quick buyer about selling your home. Ask them for a free sale price quote and within an hour they should give you a tentative offer, with zero pressure to decide immediately as you will then have a week to consider it.
If you like the initial offer, the company will then have one of its experts visit your property so that they can inspect the interior and exterior before making a final offer. For any homeowners who dislike the idea of having to endure many viewings when selling their flat or house, this visit from the quick buying company’s representative is the only such viewing you’ll need to have.
Should you then accept the final offer, the company will work quickly with your solicitor or other legal professional to complete all of the required paperwork to process the sale. The entire timeline for this, including paying you the proceeds and exchanging contracts, should only be a handful of weeks, which is often easily the fastest of the four ways to sell a property.
And if you have any doubts about selling this way, just ask a quick buyer if they can prove they are registered with The Property Ombudsman (TPO). This is an independent entity that publishes rules to shield owners from scams in the quick buying industry, and all legitimate TPO members like LDN Properties must abide by those regulations, giving you peace of mind. Never sell your home to a company that can’t prove it’s a TPO member, as it may be fraudulent.
Thankfully, it’s simple, speedy and free to check on the membership status of a quick buyer. Just visit TPO’s website and then click on the “Find a member” tab on the left side of the welcome page and then type in a company name. If the quick buyer is genuinely registered with TPO then you will next be shown their membership details. If the company is not truly a TPO member then you will get no results and you should not sell your property to them.
Frequently asked questions about alternatives to using a property auction
Because LDN Properties is a quick buyer, we are able to answer queries about selling a home through other ways than an auction, and here are our responses to those questions.
Your top questions when considering alternatives to selling by property auction
It starts with the auctioneer advertising the listing for your property in advance of hosting the auction, which will take place on a specific day, when people are able to place bids on it. If you receive no bids then your property does not sell. If your home does sell, the auctioneer will oversee the final steps involved with completing the sale of the property.
Homeowners won’t have to put in much effort when selling this way because the auctioneer will handle all of the work, which can be welcome those sellers looking to reduce their workload. Auctioning can also sometimes have the advantage of being able to secure a higher price for your property compared to selling via other means, though this is not guaranteed.
Yes, including the fact that you will need to pay commission if your home sells. This is often charged at 2.5 percent of a property’s final sale price and it will increase your expenses because the fee is deducted immediately from the sale proceeds. Selling through an auction can also take a long time, so be prepared to wait many weeks or months before a sale.
There are three conventional alternatives to selling a property through an auction, and these are selling with an estate agent, selling without any help from a third party or selling to a quick home buyer such as LDN Properties. You will find that there are specific advantages and disadvantages with each method to review before you make a final decision.
Selling to a quick home buyer will usually be your swiftest option because the entire timeline for selling your property should only be a handful of weeks, and this includes exchanging contracts and paying you the proceeds. Selling through an auction can take many weeks or even months, depending on the process. And selling on your own or with an estate agent can often take a number of months but might take more than an entire year in certain situations.
The best way to ensure you won’t have to pay any commission when trying to sell your house or flat is by contacting a zero-fee quick buyer such as LDN Properties, or selling without any help from a third party that will charge you fees. But if you sell your home at an auction or by using the services of an estate agent then you’ll need to pay them commission for a successful sale.
Ask individual companies if they can prove they are registered with The Property Ombudsman, as this independent organisation writes policies to guard homeowners against fraud in the quick buying industry, and all members – like LDN Properties – must agree to follow those rules, so this should give you additional peace of mind when you sell your flat or house this way.
