How to sell your house at auction

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Auctioning your freehold or leasehold house or flat is one option when it’s time to sell your property. But before you decide on whether to use this method for finding a buyer, it’s important that you understand how auctions work, as well as their advantages and disadvantages. This guide provides all of those details, plus information on other options for selling your home.

1. What is a property auction?
2. The process for selling your house using an auction
3. What are the costs involved with selling a home at auction?
4. What is the typical timeframe for using an auction to sell a property?
5. Summarising the pros and cons of the method of selling a house via auction
6. Top five tips for increasing your chances of selling your home at auction
7. Alternative options to auctions for selling your house or flat
8. Frequently asked questions about selling property at auction

What is a property auction?

A property auction is one way to sell your freehold or leasehold house or flat, and the other two main methods are using an estate agent or selling your home to a fast buyer such as LDN Properties. There are many aspects of the process that differ from the two other methods, and in some cases, auctions can be a valid way to make a good profit from the sale of your property.

Auctioning your home can be somewhat uncertain because you will list your property for sale at a minimum reserve price, but there’s no promise that you will actually get that price. You might get no bids, you might only get the reserve price bid, or your home might get a lot of interest and you could possibly end up selling it at a price far above the reserve price.

When you auction your home, you won’t have to do much work. Instead, the auctioneer will know how to advertise your property to potential buyers in the time leading up to the auction taking place. Then they will host the auction itself, and for conventional auctions they will take bids on a home before lowering the gavel at some point when it appears there are no more bids coming – this is when your house or flat will either be deemed to have sold or not.

Note that if you receive any qualifying bids on your property then this is considered to be a legally binding agreement to purchase your home that either you or the buyer can enforce. That kind of certainty can be enticing for some owners when deciding how to sell their property.

The process for selling your house using an auction

If you’ve ever watched television shows like the BBC’s Homes Under the Hammer then you’re aware of the basis of how a property auction will work to sell your house. People gather in a room or view an auction online where the auctioneer presents lots, describes them, announces the opening price at which they’ll receive bids, and then tries to jostle the crowd into competing by outbidding one another. The traditional method of auction is when a number of lots – houses, flats, plots of land , shops, offices and more – are listed for sale by an auctioneer and advertised in local newspapers, online, and elsewhere. The listings provide pictures of a property, details about its size, number of rooms, and other important facts, location, and the guide price. A few weeks later the auction will take place on a set date, either in-person or livestreamed online, or both. People will be able to bid in real time and compete with each other until the auctioneer lowers their gavel and the auction is completed, and then they move on to the next lot. Once the auctioneer says the famous auction words “going, going, gone” and then lowers their gavel on to a sounding board, that noise represents the formal end of the auction. No more bids can be placed after this time, and whoever bid the highest price (over the reserve price) before the gavel was lowered is considered to be the winner of the auction. A winning bid is effectively a binding legal agreement to buy your home, and you can sue to enforce this contract if the buyer tries to walk away from it. The modern method of auction is slightly different, because this situation is when an auctioneer puts a property listing online via their website and then effectively sets a timer counting down to a specific deadline usually several weeks or more in the future. During that time the listing is generally open to bids 24 hours a day throughout the week, increasing the odds that potential buyers who could not make an in-person auction might be interested in the home. Once the timer ends, the highest bidder wins. In effect, modern property auctions operate in the same way as popular websites such as eBay where people auction their personal items. Some property auctioneers only offer one of the two methods of selling your home at auction, whereas others such as London-based Drivers & Norris provide both. You’ll have to decide which approach to auctioning is the most suitable for your situation; for example if you’re not too concerned about selling your home in a hurry and would rather try to get as many bids as possible, the modern method might be more suitable for your sale. As with the traditional method of auction, if you sell your home using the modern method then whoever placed the highest winning bid once the time expires on the listing is considered to have made a legal agreement to buy the property and it’s a deal that can be enforced. Once you decide on which method of auction you would like to use, get in touch with your preferred auction house and they will prepare the listing to start the sale process. There are usually several weeks between listing and the auction itself. Then all you have to do is either wait until the day of the traditional auction or until your modern auction deadline occurs. Thankfully, the vast majority of property auctions are straightforward and both the seller and buyer comply with the terms of the sale. You’ll find that a lot of auction companies will require that the seller complete the entire purchase of your property within 28 days, and that includes exchanging contracts, signing all the relevant legal paperwork, and taking care of all the other steps that are required before ownership is transferred and you can receive your proceeds. Some auctioneers like to set a shorter deadline, and others might give both parties more time to finalise the sale in certain circumstances, so always ask for a specific auction house’s standard requirements.

What are the costs involved with selling a home at auction?

When you sell your home using an auction, there will be costs involved that you’ll have to account for in your budgeting for the sale. It’s important to fully understand these costs so that you can get a relatively accurate idea of how much money you might be able to make from selling your property via an auction, after you have subtracted the mandatory expenses.

Auctioneer’s fees are the most obvious upfront costs that you will have to pay when selling using an auction. You will be charged to pay for the work that the auction performs when they create a listing to advertise your home, as well as for organising and holding the auction itself. Some auction houses also charge extra fees on top for a successfully completed sale in addition to the auction commission.

Whenever you contact an auction company about selling your property, you must always ask them to disclose the fees that they charge sellers so that you know what they are before you make the crucial decision on whether or not to list your property for sale at an auction.

Solicitor’s fees are another important aspect of the process of selling your flat or house through an auction. You need a solicitor to put together a legal pack for your home so that prospective buyers are able to browse this before deciding whether they’ll want to bid on your home at the auction. The information contained within a legal pack includes lease details if applicable, the title plan, property information forms and any other specifics that someone might need to know before placing a bid at the auction. Costs for producing legal packs vary from one solicitor to another, so always ask a specific solicitor for their fees, but expect to pay typically between £350 and £500 for a legal pack.

There will be further solicitor’s fees to pay in the event that your home successfully sells at an auction. This cost is to cover the effort that your designated solicitor will undertake in performing the conveyancing work necessary to complete the sale of your property to the winning high bidder. These fees can often range from £450 to £750 plus VAT, although the exact price will depend on which solicitor you use, as well as the final sale price for your house or flat.

Note that some auctioneers will let buyers make additional charges to the winning high bidder through the use of special conditions of sale, so ask the auction company whether this might be a possibility. If you can do this it may boost your profit from selling because you may be able to offset some of your auction related costs incurred.

Also, if your home fails to sell at the auction then many auctioneers will still charge you fees to cover the costs of their work and advertising your property. If you are deterred from wanting to use an auction because of the costs, you might want to consider selling your home to a fast house buyer like LDN Properties because they never charge homeowners any fees.

What is the typical timeframe for using an auction to sell a property?

Before you can get to the auction day itself, your property will have to be listed and advertised so that potential buyers are aware of the lot before the sale takes place. You can generally expect auctioneers to require a period of a few weeks between the date on which you list your house or flat for sale at an auction and the day on which the auction takes place.

As described above, many auction houses have set a deadline of 28 days for a winning high bidder on a property to complete all aspects of the buying process, and that includes signing all the required legal documents, exchanging contracts, and every other mandatory step. This is a relatively speedy timeline and can be beneficial to those homeowners hoping to sell in a hurry.

Some auctioneers require buyers to finalise the purchase of properties in even less time, such as 20 days, whereas others might provide more time such an extra month or more. You should always check with specific auction houses to find out their standard policies on completing sales.

Taking all these steps together, you can typically expect the process of selling your home through an auction to take anywhere from six to 10 weeks, or possibly more or less time.

Summarising the pros and cons of the method of selling a house via auction

When you want to sell a home you might have certain priorities, such as making sure you maximise your profit from the sale or manage to find a buyer as quickly as possible. Selling via auction has certain advantages and disadvantages that could either help or hinder you achieving your top goals for selling, so it’s important that you browse the potential pros and cons below to see whether auctioning your property might be the best approach for your sale.

Pros of the method of selling a home via auction

The HomeOwners Alliance, an independent entity that advocates for the rights of property owners, explains that one benefit of selling at auction is that it can provide more certainty and a quicker timeline for selling your home compared to using an estate agent. That’s because you’ll be given a specific date on which the auction will take place, rather than waiting for an unknown amount of time to see whether your estate agent might receive any offers. If you receive a bid that qualifies on your home at the auction then it is legally deemed to have sold, and many auction houses require that contracts be exchanged once the gavel is lowered. Still, it’s crucial to remember that if you don’t get any bids on your property then it will not sell. Another important advantage of selling your home via an auction is that many auction houses know how to sell a very wide range of properties, including those that might have potential negative or unusual features. A small sample of some of the many varied properties that a number of London auction houses have managed to successfully sell includes homes situated under noisy airport flight paths or that are near busy railway stations, houses that have dry rot or subsidence or another major structural fault, flats with very short leases remaining, houses that do not have planning permission, properties located in flood zones, inherited retirement homes that the new owner does not want to keep, and more. If your home is very popular among buyers you could also stand to make a significant profit through an auction compared to other methods of selling. The buyers will all keep trying to offer ever-increasing prices for buying your property, which will hopefully increase the final sale price. This is often one of the top reasons that homeowners have for deciding to sell via an auction. When you sell your home through an auction you also won’t have to worry about hosting viewings. These are the times when an estate agent will bring potential buyers to your property to allow them to inspect the exterior and interior, with the hope of enticing them to make an offer to buy the home. Many homeowners often find viewings very time-consuming and inconvenient, and auctions can therefore be a preferable method of sale.

Cons of selling a home via auction

Perhaps the biggest drawback of selling your home through an auction is the uncertainty about how much profit you will be able to make from the sale – if your property even sells. You might not get any offers on your property; in which case the home will not sell and you will have to start the process of selling it all over again. Or possibly you only receive one bid at the minimum reserve price, and your home will legally be deemed to have sold at that value. The reserve price is the lowest possible value at which you are comfortable with selling your home. Auctioneers often try to convince sellers to set this at a low rate, as this increases the chance of a sale. However, there is no promise that you’ll get such an outcome. That’s why it’s vital you set the reserve price at a level you are comfortable with after subtracting all of the possible costs of the selling process, including any commission that the auctioneer might charge. Another negative aspect of selling through this method is that the auctioneer may not have the same skills as an estate agent when it comes to marketing your home. If they struggle with knowing the right way to advertise your property, it may reduce the chance that people might be interested in buying it once the auction eventually takes place. You can always ask auctioneers in advance how they would market your home if you sold through them. Fees can also be a significant downside of selling via auction, because you’ll typically have to pay the auctioneer commission for doing the work of advertising your property and holding the auction. Commission charged can be considerable and sometimes more than what an estate agent would charge. Also, if your home does sell at an auction, you will have a short window of time before you must completely vacate the property. Auctioneers often set 28 days from the sale as the deadline by which the buyer must complete all parts of the purchase, including exchanging contracts, at which point they will take ownership of the property. If you decide to sell by auction, make sure that you can be out of your home within 28 days of the auction taking place.

Top five tips for increasing your chances of selling your home at auction

Much like with selling your home through an estate agent, there are certain steps that you can take before an auction occurs that might make your home more enticing to potential buyers – a read through the UK Government home selling advice may be useful. Some of the steps do not require you to spend much time or money, whereas others could include some costs and also delay the date on which you’re able to sell your home. You’ll have to assess whether the tips are viable for your individual needs with your property sale.

Do some advance research about auction houses in your area

It’s vital that when you are thinking about selling your home via auction that you spend some time doing online research about auction houses, as well as contacting specific companies to ask them more details about their process for hosting auctions. Look up the name of auction houses on the internet, because this can reveal whether they have any negative news articles or bad customer reviews written about them that might alert you to potential problems. And quizzing auctioneers about how they will sell your home will help to give insight into how hard they’ll work to find a buyer for your property.

Make sure the exterior of your home is in good condition

A simple and cost-free or at least very low-cost option for making your home more attractive to potential auction bidders is spending some time to ensure that the outside of the property looks as good as possible. This means mowing the lawn, removing any weeds from the garden, giving a fresh coat of paint to window ledges and the front door, replacing any broken roof tiles, and other steps that improve the overall appearance of the home. First impressions are important when selling a property, and the better condition that your home’s exterior looks, the more attention buyers are likely to give it.

Consider fixing any negative issues about your property

If you have problems at your home, whether large or small, spending time and money to fix them before attempting to auction the property can make a major difference in the final sale price you might get for it. Tending to negative issues with a house or flat ahead of trying to find a buyer for it could increase the overall value of the property. For example, if your home has damp but you pay to treat it, this could increase the minimum reserve price that you can reasonably set when you list your home for sale at an auction. However, not every homeowner has either the funds or the time to take for such work before selling their property, so whether you can use this tip will depend on your own circumstances.

Confirm with the auction house what fees and other charges you’ll have to pay

Some auctioneers might charge upfront costs or require the payment of non-refundable deposits from either bidders or sellers or both. And one auction house might have an entirely different rate of commission than another company. It’s important that you ask each auctioneer you’re talking with for a full list of their expenses, so that you know everything you might be expected to pay during the auction process. This will help you to budget the potential sale of your house or flat much more accurately.

Know what penalties you might have to pay if you withdraw from the auction

It’s possible that after you have listed your home for sale through an auction but before the actual day of the auction arrives, you might want to no longer proceed with the sale. Perhaps you have received an offer through another method, or you might even want to delay the sale of your home. Whatever the reason, it’s important that you understand you might have to pay penalty costs to the auctioneer. Ask specific auction houses in advance what their policies and charges are for withdrawing from an auction.

Alternative options to auctions for selling your house or flat

After reviewing all of the above information about using an auction to sell your home, you might decide that it’s not the best option for your specific situation. If that’s the case then you still have at least two other choices for trying to find a buyer for your property – you can either contact an estate agent to sell your home, or you could get in touch with a fast home buying company.

Contacting an estate agent to sell your home

Instead of using an auctioneer, you might consider contacting an estate agent to sell your house or flat. One of the main benefits of selling your home this way is that the estate agent will handle most of the hard work involved with finding a buyer for the property. They will create a listing for your home that features photographs designed to show off the inside and outside at their best, as well as providing key details such as the size, number of rooms, and asking price. They’ll then advertise this listing in their office, online, in local newspapers and elsewhere.

If someone expresses interest in potentially buying your home, the estate agent will then arrange for a viewing, where the buyer can come to the property to tour it before deciding whether to make a formal offer to purchase it. Some homeowners find these to be time-consuming and inconvenient, which can be a drawback of using this selling method.

A potential complication with selling your home via an estate agent is that they might not know how to sell your property if it has certain unusual characteristics or negative attributes, ranging from subsidence through to being located on a noisy street. If the estate agent has never tried to sell your type of home before, they might not know the best ways to generate interest from prospective buyers and it could be a long time before your home sells. Ask any estate agent that you’re interested in working with for their history of selling properties like yours. If they have never sold such a home before, you might want to consider finding another way to get a buyer.

Also, when you sell your property to an estate agent you will have to pay them commission for the hard work that have done in listing your home, hosting viewings, and finding a buyer. You can expect to pay a commission usually based as a percentage of your home’s final sale price, although this rate can be more with some properties and estate agents.

Also on the issue of your sale price, some estate agents will entice you to work with them by quoting you a generous projected value for your home – even though they truly know that in order to sell the property, the price will be lower than what they’re quoting you. They do this because they want to get your business and hope that such an optimistic price will secure the deal. To avoid being led astray, you should ask several estate agents for their quotes of how much they think they can sell your home, and look at the average across those prices.

And yet another negative aspect of selling using an estate agent is the amount of time it can take to find a buyer. Although some homes sell within days of weeks of going on the market, many other homeowners have to wait for several months or even more than a year to find a buyer. That’s far from ideal if your top goal when selling is to find a buyer as fast as you can.

Getting in touch with a fast home buying company

Another way that you might be able to find a buyer for your house or flat is to contact a fast property buying company such as LDN Properties. They are experts making quick and competitive offers to buy all shapes and sizes of homes, without charging any fees.

LDN Properties, for example, has been buying flats and houses throughout London since 2003 and offers a straightforward, hassle-free and no-stress alternative for selling your home.

To start with selling your home this way, contact the fast buyer and within the first hour of talking they should be able to give you an initial offer for purchasing your property. There’s no pressure to decide immediately as you’ll typically have at least seven days to consider the offer. If you want to accept the offer, the next step will be for a representative of the company to visit your property to assess the exterior and interior before making a final offer. And the final step is when the fast buyer works with your solicitor to complete all of the necessary paperwork for purchasing your home, and the entire process should only take a handful of weeks at most.

One of the major advantages of selling your house or flat to a quick buyer is that the reputable companies will never make you pay any commission or other fees. That means you will get to receive all of the proceeds from whatever final sale price the company might offer for buying your home.

And fast home buying companies are also able to consider making offers on a huge variety of freehold and leasehold properties, regardless of their type or condition. So even if you own a dilapidated home, a property that doesn’t have planning permission, a house with damp, or many other different types of situations, a fast buyer might be able to make an offer on it.

A further benefit of using a fast home buyer is that you can get peace of mind about whether the company that you’re talking with is reputable. That’s because the trustworthy quick buyers, like LDN Properties, tend to be registered with The Property Ombudsman (TPO). This is an independent organisation that publishes regulations that all members must follow to protect homeowners against fraud in the fast property buying industry.

It’s simple to find out whether a company is registered with TPO, simply visit the entity’s website and then click on the tab on the main page marked “Find a member” and type in the name of a specific fast property buying company. If they are registered, you will be taken to a page with their full membership details. If they are not registered with TPO, you should be wary about selling your home to them because it’s possible that you’re dealing with a fraudulent business.

Frequently asked questions about selling at auction

Homeowners looking to sell their properties at auction often have a range of questions for us, from the time it takes to sell a home through to the costs of selling. Here are a selection of the key questions we’re usually asked about selling a house at auction: