Guide to Getting a Quick Sale at Auction
Welcome to Our Online Property Auction
Thank you for reaching out to us and taking the time to read this guide…
The co-founders at Property Solvers have been involved in the home buying and selling industry since 2003.
Our core focus has always been to provide a fast, efficient and genuine win-win service.
We offer a We Buy Any House (fast cash home buying) service, a 28-Day Estate Agency alongside a fully-fledged online Property Auction House.
This guide goes into this latter option and, based on our initial conversations, why we feel it’s an excellent way for you to get a fast and efficient sale for a great price.
If you haven’t had the chance already, please also check out our regularly updated Quick House Sale Blog and Homeowners Hub which contain up-to-date useful information.
Remember, our lines are open 24 hours, 7 days a week and we always make ourselves available to help…
Contact Property Solvers Online Auctions
24-hour Freephone: 0800 044 3696
Office Telephone: 020 8226 6901 (08:30 to 17:30 Monday to Friday)
Email: auctions@propertysolvers.co.uk
Website: www.propertysolvers.co.uk*
*Use our chat facility towards the bottom right of your browser to also get in touch
Why Sell Through an Online Property Auction?
Across the UK property auctions are a well-established way to get a firm sale within a much shorter timeframe compared to using an estate agency.
It’s a common option that sellers choose when their properties are dated, need renovating, unusual or more challenging to sell on the open market.
However, things have changed…
Auctions continue to grow in popularity amongst a broader range of homesellers.
Today, 1 in 3 estate agency sales falling through.
With auctions, the chances of this happening are slim to none.
Once the auction bidding is done and the virtual hammer falls, buyers must
- pay a non-refundable reservation fee;
- exchange contracts straight away;
- or both of the above the above.
This means that there’s very little reason for the buyer to pull out of the sale as they will probably lose money if they do so (not to mention the fact that most are super eager to move forward).
Benefits of Selling at Auction
Auctioning a property may seem like a daunting prospect, especially if it’s your first time.
However, the sector has modernised considerably in recent years and has become much more easily accessible (even for the technophobes amongst us!). As a result, the process has become more transparent and easier to navigate.
- Auction buyers are more focused and serious. Compared to estate agency sales, you’re less likely to find time-wasters and ‘window shoppers’;
- There is usually not as much ‘nit-picking’ compared to estate agency sales. Auction buyers know what they want and go for it;
- There is a lot more certainty and security compared to an estate agency sale;
- Buyers cannot suddenly drop the price between exchange and completion (known as ‘gazundering‘);
- A reputable auction house (like ourselves) usually has a database of serious buyers and property investors. This means you have a ready-made pool of active buyers;
- Auction buyers are usually much less concerned about the property’s condition;
- You’ll normally have no issues when selling a tenanted property. Auction buyers can often be landlords / developers looking for new properties (even if you have arrears or other tenant-related issues);
- Auctions are a particularly good way to sell an inherited property, even if there are complex issues involved;
- If the property is at risk of repossession, an auction is an excellent way to find a committed buyer willing and able to work to strict deadlines for completion;
- You should be able to sell – albeit at below market value – if there are major structural issues, subsidence, Japanese Knotweed or other issues that may have been raised by a surveyor. Similarly, properties with short leases usually sell successfully at auction;
- If you’re selling a commercial / mixed use property or land, auctions are a great place to find serious buyers.
- The fees are not too dissimilar to estate agency charges;
- We often describe it as a happy medium between getting the speed of using a sell house fast service and using an estate agent to achieve maximum value;
- As long as your property is guided in the right way, you will have less concerns about issues like Brexit and other external shocks affecting the price you get.
Why Using an Online Auction is Better Than Traditional
It’s worth noting that, particularly as the digital age continually evolves, the auction industry is going through a profound transformation.
Below are some of the downsides that we feel continue to mount against traditional auctions:
- Completion time frames are too quick for most buyers. This narrows the ‘pool’ of bidders to those who are either cash buyers or can access so-called ‘flash’ finance. Less buyers bidding means a lower sale price (typically 70-80% of market value);
- There are long wait times to get properties listed and on the market (many sellers find themselves waiting for 1-2 months before the auction date);
- Especially with the more popular auction houses, properties often end up ‘buried’ in the auction catalogue – meaning they don’t get the kind of exposure they deserve (and the sales price ends up lower). Sellers have often complained that their properties end up unnoticed. The best time to sell at auction is close to the start when buyers are alert and eager. Push things too late and there’s often the risk that interest wanes;
- Traditional auctions do not get as much reach and tend to attract fewer buyers. For instance, buyers from the other end of the country and abroad often miss out on opportunities they otherwise would be interested in;
- The coronavirus pandemic taught us much about the impracticality of traditional auctions. It makes little sense these days to head all the way to a packed-out auction room when buyers can make their offers from behind their phones, laptops and PCs. We feel this trend will continue even after the pandemic;
- In the same way as eBay and other online auction sites have enabled us to transact quicker and easier than ever before, it’s somewhat inevitable that property auctions would follow suit.
Property Solvers Online Auctions
Property Solvers offer an online auction as part of being a ‘one-stop shop’ for homeowners looking for a quick and secure sale.
- A much safer sale compared to using an estate agent (very low risk of things falling through);
- Get your property listed and attracting buyers straightaway;
- Easy use ‘eBay-style’ secure bidding platform (see our example listing). Buyers can bid on your property 24/7 from their PC, laptop or mobile phone;
- Excellent exposure (all the major portals including Rightmove, Zoopla and Prime Location);
- Discounted legal packs (with ‘pay later’ options available);
- Buy it Now options (to sell even faster!);
- No risk of your property getting ‘buried’ in the auction catalogue (like traditional auctions);
- 24-hour enquiry line and buyer viewings available 7-days a week;
- Sell land, commercial and mixed-use properties much faster.
Property Solvers run two types of auctions (see below) that provide you flexibility over the speed at which you will exchange and complete on the sale.
This means you can choose the best elements of a traditional ‘in the room’ auction whilst benefits from a state-of-the-art auction platform designed to achieve a quick and efficient sale.
We look at each sale on a case-by-case basis and base our recommendation on what we will get you the best outcome.
Conditional Auction (56 Days)
Sometimes referred to as the ‘Modern’ Method of Auction (MMA), we stretch out the completion or settlement date. This means that we can attract retail buyers who are willing to pay higher prices than at traditional auctions.
Everything is done online and people can bid from anywhere in the world 24/7.
We’ll conduct a best bids process where the winning buyer will secure a 4-week (28-day) exclusivity period to exchange on the property. A non-refundable deposit is also instantly required.
The buyer will usually arrange mortgage finance during this time but must exchange at the end or risk losing all of the deposit. At the point of exchange, a 10% deposit is paid into the buyer’s conveyancer’s account. There is then a further 4 weeks (28 days) for the sale to complete.
We often describe it as a ‘middle ground’ between a normal estate agency sale and a more traditional auction / quick cash sale. In terms of the price you’ll achieve, you can typically expect to achieve between 90-100% of the value of the property. Property Solvers can typically find you a buyer within 3 weeks from listing.
Unconditional Auction (28 Days)
This is a better option if you’re looking for a quicker sale and wish to attract a more professional type of buyer / investor. It works well if your property needs work or has tenants, for example.
Incorporating the traditional way of selling at auction, once the virtual hammer falls the buyer has effectively exchange contracts and will need to pay a minimum deposit of 10%.
The buyer is then obliged to complete on the sale within 28 days. Failing to do so means that he/she will lose the deposit and face other financial penalties. It’s therefore extremely rare for the sale to fall through. If it does, you will be entitled to claim for both the deposit and extra damages.
Pricing Your Property for Auction
We take a 4-step process to valuing your property for auction and will produce what we call a ‘desktop’ valuation.
Apply Royal Institute of Chartered Surveyor (RICS) Standards Using HM Land Registry Data
The team at Property Solvers has many years of experience in valuing properties.
We follow RICS guidance which means that the valuations we provide are aligned with professional home valuer estimations (so-called ‘Redbook’ standards).
Using house valuation tools derived from HM Land Registry data, we’ll primarily look at sold property comparables.
Property Sizes
We will check the sizes of these nearby properties we come across (typically within 1/4 of a mile).
Most streets in the UK have different types of properties and it’s not always easy to compare like-for-like.
For example, yours may have a larger garden or had a back or roof extension.
Other times, the differences can be more subtle. We will happy show you our findings and run off one of our detailed house valuation reports.
Property Condition
Our sales executive would have asked you some questions about the current state of the property.
For example, if you have recently refurbished the property and/or significantly improved its appearance, we’re likely to suggest pushing the auction prices upwards as buyers would not need to undertake these works themselves.
Local Market Conditions
We’ll take a closer look at your local property market using tools such as Rightmove+ and our in-house local house market insights tool.
These give us a unique understanding of the ebbs and flows alongside other crucial influences such as average speed of sale of properties in the area and differences between estate agency asking prices and sold values.
This part of the analysis will also examine growth prospects such as local planning policy, new developments, blights, education, health care, amenities transport links / prospects amongst a range of other micro influences.
Suggested Auction Prices
After we have assessed the various factors outlined on the previous page, we will provide you with a suggested reserve and guide prices. To confirm the difference:
Guide Price
This price will be based on what we feel the property is worth in its current state. This can be either a single figure or price range (i.e. £X to £X). Much will depend on the expected level of bidding interest during the auction, demand, the state of the market and other dynamics. As professional auctioneers, our aim is to push the price above this level.
Reserve Price
This is the minimum figure that you would be willing to sell at. The bidding must reach this figure in order for the property to be reserved (and sold). This figure will be agreed before the auction between us and will be kept confidential. If the bidding does not exceed the reserve the property will be left unsold and you have the option to run it through the next auction for free!
Viewing Your Property
Although many clients don’t wish to do so, after presenting our findings and estimates, we would be more than happy to send one of our associated agents to view the property.
This will give us the opportunity to take a closer look and confirm the valuation. Of course, there is no obligation for this and many clients prefer to go ahead without delay.
Either way, we are always available to answer any questions you may have regarding the process every step of the way…
Auction Legal Packs
Although you may be aware that legal packs are not compulsory to sell a property auction, we rarely recommend moving forward without one (unless you’re in a particular rush).
For a start, buyers will often be sceptical and think that some of the details are not being revealed.
As a result, they will bid low (or not at all) to avoid taking on risk. We find that transparent auction sales, where all the specifics are presented without any ambiguity, are the ones which get the best outcomes.
For these reasons, we strongly recommend getting one produced, which will typically contain the following:
- The Title Register from HM Land Registry;
- Conveyancing Searches;
- Special Conditions of Sale;
- Property Information Form (TA6);
- Fixture & Contents Form (TA10);
- Leasehold Information (TA7) and Property Enquiries (LPE1) forms;
- Tenancy Agreements and Proof of Rental Receivables (if you’re selling a tenanted property);
- Commercial property leases (where required);
- Planning and building regulation documentation.
We delve into all the legal aspects of selling at auction in our Auction Sellers Legal Guide. If you have not already received a copy and/or would like to chat about how to access reasonably-priced legal auction packs, please email us at auctions@propertysolvers.co.uk.
Selling Commercial Property and Land
Due to their inherent uniqueness, auctions are often a common place for commercial / mixed-use properties and land to be sold.
Most active buyers of this type of property regularly check out portals such as our own to see what is available.
There’s also a strong argument to say that commercial property and land sales perform better at auction as there is usually a solid flow of investors who actively compete against each other.
Whilst our valuation process is more nuanced compared to residential properties, as with any auction sale we undertake, we can get your building or plot listed within very short timeframes and guarantee excellent exposure.
Appreciating the extra complications involved in this type of transaction, we typically extend the time for selling commercial property to 56 days.
Where required, we can also apply conditional auction conditions (taking a non-refundable deposit
once the bid is won) and extend the overall sale period without losing the security of sale.
When getting in touch with us, we would ask that you forward any plans, leases, photos/images,
surveys, insurance policies, planning permissions and any other documents that would help
assess the property quickly.
Marketing Your Property for Maximum Success at Auction
Advertising homes is something we’re passionate about here at Property Solvers and we pride ourselves in stimulating the very best exposure for our clients.
- Top-notch photography and floorplan alongside appealing property particular descriptions. For an extra fee, we can also produce virtual tours using Matterport arguably the best in the business (see an example of a property we previously sold here);
- We have FOR SALE AT AUCTION boards in your area ready and waiting to be mounted (and will quickly change the slip once sold + remove once the sale is complete);
- In addition to our own auction platform, your property will appear on the major sites –including Rightmove, Zoopla, Prime Location, the House Shop, Net House Prices, Mouseprice, Home.co.uk, Essential Information Group (the UK’s leading auction property portal) and a number of others (see where advertise);
- We’ll produce a detailed brochure to distribute amongst potential bidders (and made downloadable from our auction portal) which runs through all the specifics of your property;
- Social media promotion (Facebook, Twitter, Instagram and LinkedIn). We also have close relationships with the UK property investor community, such as through our Property Investor’s Blog, and 37,000+ strong LinkedIn Property Investors & Developers Group;
- A friendly freephone (0800) enquiry line that’s open 24/7 as well as an online chat service – we never miss a beat! We’re able to organise viewings / open days 7 days a week (including evenings). We are a phone call away and your messages will never get lost or passed from pillar to post.
Auction PropTech
Complementing the above, Property Solvers has invested heavily into our IT infrastructure to make the auction sales process as simple and hassle-free for all involved.
This means we can offer the following benefits to all our clients:
- A simple booking procedure including text and email reminders with property briefs. We can organise viewings and open days around your schedule including evenings and weekends or, if you’re comfortable with it, we can take a set of keys and handle things in an entirely ‘hands-free’ way;
- Quick feedback on viewings and a weekly sales report which will show you how many people have viewed online (through Rightmove and Zoopla) as well as the status of the sale;
- Internal processes for buyer vetting, registration and Anti-Money Laundering (AML) checks in addition to proof of funds / mortgage and/or bridging finance verification. We’ll upload the legal pack documentation and other relevant information quickly to ensure the entire auction sale process is 100% transparent. We’ll also liaise with auction conveyancers / solicitors to ensure everything is executed in a timely manner (including collation of searches and other Law Society documents);
- A fast and efficient back-end system enables us to respond to any and all buyer enquiries rapidly;
- Auction management, scheduling and term setting (including ‘Buy it Now’ / bid control / proxy bidding).
- We’ll manage the entire reservation and sales memorandum drafting processes. We will stay on top of the sales process right through to completion (sales progression). We’re a phone call / WhatsApp message away and regularly check our emails.
Our Auction Sales Fees
Property Solvers charge very competitive fees for our auction services (regardless of whether you choose the 56 or 28 day options).
As there is a considerable amount of work required pre-auction, we request a relatively small sum of money to prepare your property for sale in an optimum way. This is required to protect ourselves in a scenario where sellers pull out pre-auction.
However, if you’re not in a position to pay this immediately, we are able to defer the payment to the point of completion.
We’ll then charge a small 1.5% fee + VAT (minimum £2,000 + VAT) payable only once the property is sold.
A few things to note about property auction fees…
You may have come across auction houses that will charge no fees. Instead, they pass the fees on to buyers.
Whilst this may seem like a good way to save money – it’s often counter-intuitive as buyers would often be reluctant to bid and, when they do, their offers will be lower to factor in the extra costs they will incur;
Related to the above, buyers will incur extra stamp duty liability as any reservation fees are added due to being classed as ‘chargeable consideration’. This is another reason as to create a level playing field and split our fees between the buyer and seller;
Remember, if you’re selling the property held within a company, our fees are 100% tax-deductible.
Our Property Auction Process Explained
Initial Phone Discussion
We’ll start by having a discussion about your current property sales situation. The aim here is to find out whether selling at auction is genuinely the best way forward based on your circumstances.
For instance, we sometimes see that our fast house sale or quick estate agency options may work as better alternatives.
Please feel free to ask any questions regarding the auction process. We’ll never put the pressure on and appreciate that you may just be making enquiries.
Property Factfind and Valuation
Our sales executive will ask some headline questions regarding your property’s condition and other specifics. The more information you can provide here the better.
We’ll then be able to undertake detailed house valuation research and come back to you with recommended guide and reserve prices for auction.
Decide on Conditional or Unconditional Auction
Our recommended prices for auction often depend on how urgently you’re looking to sell.
Some clients simply want to sell quickly or are looking for cash buyers only. In these circumstances, the 28-day (unconditional) auction is the better option.
Others are happy to wait longer and open their property to retail buyers (i.e. those that will typically buy with a mortgage). Here, our 56-day sale would be the better option as we can still take a non-refundable deposit to secure the sale when the virtual hammer falls (and exchange of contracts happens after 28 days).
Suggested Guide and Reserve Prices
The guide and reserve prices are usually based on whether you choose our unconditional (56-day) or conditional (28-day) option.
Typically, as there is more time with the unconditional sale, we would normally suggest a guide price of 90% of the market value with a reserve of 85%. However, it’s not uncommon to see properties sell for 100% of their market value.
With our 28-day auction sales, we usually recommend a guide price of 85% and a reserve of 80% of the valuation.
Agent Viewing
We can visit the property 7 days a week at a time convenient for you.
Sometimes, especially if the legal pack is already prepared, it makes sense for us to take photos and produce a floorplan at the same time. We can also organise the Energy Performance Certificate (EPC) if necessary.
This means we can get your property listed on all the portals quickly.
RICS Survey
You are under no obligation to book a Royal Institute of Chartered Surveyors (RICS) valuation.
It can, however, sometimes encourage more potential bidders as more feel comfortable with proceeding and things are being kept transparent.
Sales Agreement
Once you are happy with everything, we will send you our auction sales agreement via email. This needs to be ‘e-signed’ by all owners for us to be able to move forward with the marketing of your property.
Set-Up Fee Payment
Property Solvers will require a set-up fee to get started on the auction process. We charge this amount as there is a lot of work behind the scenes. Note that, for an extra cost, you can opt to pay this fee upon completion.
Terms & Conditions / Legal and Operations Guides
We will also send you a copy of the terms and conditions (these are in line with 4th Edition of the ‘Common Auction Conditions’ reproduced with the consent of the Royal Institute of Chartered Surveyors).
You’ll also receive copies of our legal and operations guides which run through all the necessary procedures that will be followed when selling at auction.
We are, of course, completely available to answer any of your questions.
Legal Pack
We rarely suggest moving forward with an auction sale without a legal pack in place.
Extra information will also be required if you’re selling a tenanted, pre-repossession, inherited/probate or commercial property / land.
Omitting this key information often means that buyers will feel less confident about the purchase and bid lower (or not at all).blog
Property Solvers have conveyancing partners we can put you in touch with who offer competitive ‘pay now’ and ‘pay later’ options.
Photography, Floorplan and EPC
If this process was not undertaken during our initial viewing, we’ll get these organised with one of our professional partners in your area.
Please not there are no extra charges here (even for the Energy Performance Certificate if you do not have an up-to-date version).
We would also suggest preparing the property as best you can (check out our 101 tips to sell your property quickly).
Advertising for Auction
We take pride in providing high-quality listings and your property will be published on all the major portals to draw in the maximum amount of attention (see where we advertise). Rest assured, this is what we do best!
We typically recommend marketing the property for 21 days before starting the bidding process. However, we are happy to adjust this as circumstances dictate.
Viewings and Open Days
Our viewing experts are available 7 days a week to host viewings. In many cases, we run open days where we invite multiple buyers to view the property. This often serves to create a competitive environment when it comes to the bidding process.
Provided that you are comfortable with handing the keys over to us until completion, we are happy to take full control of this process to keep things completely hassle-free for you.
We will also make ourselves fully available to answer any questions relating to the property and can run second viewings when appropriate to do so.
Bidder Registration
By law, we are required to formally register potential buyers before allowing them to bid on our portal. This requires us to undertake full identification and Anti-Money Laundering checks to ensure that there is nothing untoward. Undertaking this process saves a lot of administrative hassle once the auction process concludes.
Let the Bidders Bid!
Prior to the bidding process we will send all qualified buyers our operations guide (different to the one sellers receive) and an explanatory video which explains the entire process to avoid any confusion. They’ll also receive regular reminder emails.
We typically allow a 48-hour bidding period and, in addition to continually monitoring progress, will make ourselves completely available to answer any questions from buyers (and yourself of course). You will also be able to see bidding activity directly on the portal. We will also advise you of any proxy bids – i.e. where buyers enter a maximum bid and we bid up to that amount on their behalf (similar to eBay).
We usually allow qualified bidders a 48-hour period to submit. There is no limit to the amount buyers can bid up to, we will be sending the alerts when their bids have been beaten.
This also means that the sale cannot be gazundered (i.e. see a drop).
SOLD!
At the end of the bidding period, the virtual hammer will fall and the sale price is confirmed. You will be able to see the final price on the portal itself but we will be getting in touch to confirm things as well.
We will also be communicating with the winning buyer to confirm the next steps, completing the Memorandum of Sale and moving things forward.
No Refund Reservation Fee
With both our 28-day and 56-day auctions, the buyer will be required to pay a non-refundable reservation fee of 2% + VAT to secure the property. We usually take a charge on all bidder’s debit/credit card and the money will be withdrawn from the winning bidder automatically. This avoids any confusion at the close of the auction.
Exchange of Contracts
One of the beauties of selling at auction is that, once the hammer has fallen, the chances of things falling through are slim to none.
With our 28-day (unconditional) auction, the terms and conditions state that exchange of contracts happens at the fall of the virtual hammer. This means that the buyer (unless otherwise agreed) must pay a deposit of 10% and complete on the sale within 28 days. Failure to do so could mean the loss of the reservation fee, deposit paid alongside other financial penalities and abortive costs.
Note that with the 56-day auction, buyers have 28-days to exchange contracts. Similar to the 28-day auctions, buyers will need to pay a non-refundable deposit and face heavy penalities if they were to withdraw from the sale.
Conveyancing
Although much of the legal work is already completed pre-auction, there will be some final processes to undertake. You will also be sent legal documents to sign to finalise the sale.
Completion and Post-Sales Assistance
Once the sale is complete, the team at Property Solvers will be completely at hand to organise key handovers and assist with any other issues that may emerge.
