Selling by auction pros and cons

[LaBelleSauvage123]

Am looking for advice from people who have sold property via an auction. My late uncle’s house has been on the market for just over a year and we are beginning to despair that it will ever sell. It’s a lovely old house with a huge garden but the longer it stands empty the more bits of it start crumbling. The garden in particular is hard to keep on top of, especially at this time of year. We are wondering whether it might be a good idea to go to auction as it’s definitely a ‘doer-upper’. What are the pros and cons?

They charge a fee, sale or no sale

other than that you know what the fees will be when sold and you can ut in a reserve - but failing to sell still means fees

choosing the right action for your location, property type etc is important

Just some thoughts.

pro: potential to make a decent sale - if the minimum price is set low enough to generate interest AND you get a bidding war.
pro: fewer cost to yourself(?)
pro: sale goes through quicker - if you get a sale.

con: heavy costs on the buyer may put off otherwise potential buyers
con: A fair number of potential buyers won’t even look at an auction property, either the traditional or modern version.
con: may not even reach your reserve bid (will you incur further costs as a result of failure to sell?)

If you haven’t managed to sell have you at least had any interest?
Remember anything will sell for the right price, price is always the problem for any property that won’t sell.

There's a property locally that I love but it is going to auction so i won't pursue it. Imo PP is right that going to auction will put off some potential buyers.

Buyer fee of usually in the region of £5k would immediately put me off, when we were looking at houses, anything up for auction was immediately a no-no so you may end up cutting a big chunk of your market

Baught our property through modern auction... Stressful at times but certainly efficient.

A lot of buyers would not even consider buying at auction, especially not the awful 'modern method of auction' where the buyer is charged a huge fee. You will therefore likely get less money than via the more usual route.
The house isn't selling because you/other family have priced it much higher than the current market will pay. It obviously needs a lot of work and these sort of houses have fallen in value a lot as the cost of both work and materials has risen hugely. If you want to sell it, reduce the price very significantly and it will sell.

They are usually expensive and you are restricting your market. Are you willing to post a link? I’d look at a substantial price reduction and try and find a buyer myself.

Auction? No, I do not consider auction properties.
Reduce the price, which in effect you are doing with an auction anyway.
Doesn’t need to be substantial, just down into the lower search bracket.

It the property is mortgageable then I wouldn't use an auction because it will stop some potential buyers from buying. If it isn't i.e isn't currently livable in then go for it. It is basically a quicker way to sell than normal sales but the price you get is usually but not always lower. Do not bother with modern method of auction. It is crap for everyone.

I bought my house last year at auction. Much less stress than a chain sale and got it done in time for school start. I dont think the buyer fee should discourage anyone - you just add it to the house price and decide if its right for you. Dont understand why people say its expensive. All the costs are transparent, no matter how they are called. Just add them all up.

But the need to work within specific timeframe will limit your pool of buyers. It usually means cash or individuals that are very organised.

At the end of the day, it's all about price. If you are willing to be realistic, the usual high street EA does make more sense.

Thank you all - certainly food for thought.

Probably will be better to sell the traditional way but it sounds like you need to reduce it significantly to stimulate some new interest.

You don’t say whether you have tried reducing the price already but there should have been several reductions really for a house on the market that long.

Yes there have been several reductions. We’re aware that if we send it to auction we will have to take a hit on price but tbh the thought of a potentially quick sale and not having to deal with people who make offers and then withdraw after months of faffing around is quite attractive!

We were looking at an auction house recently but were massively put off by the £20k!!!! Auction fees. Ridiculous.

But surely you reduce your offer to offset the fees?

@OneForTheToad, well yes, you do, but then you're at risk of not being able to buy the house because your offer isn't enough? Unless you try and buy a house that's loads less money than you want to spend.

By any chance was this a "modern method of auction" thing?

If so, then yes, those are a real rip-off.

In a normal auction it is the seller that will pay the main fees but there will usually also be a fee to the buyer of around £1,000 - £1,500.

However, it may be that there is a condition for a particularly property that the buyer must pay the seller's fees, which are typically going to be around 2%+VAT.

So, if it was a traditional auction you would only be looking at £20k fees as a buyer if the seller was insisting that the buyer pays the sellers fees as well as their own fees and the likely price that it would fetch would be in the region of £770k.