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The Benefits of Selling at Auction

Publish Date: 10 October 2017

By Beth Fox

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The Benefits of Selling at Auction

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The Benefits of Selling at Auction  

The auction method is a fair and open process for the vendor and the buyer. Particularly when dealing with those properties in high demand, the buyer knows they won't suffer from gazumping whilst still gaining the vendor the best price in the market place and a certain conclusion to the sale. 

Key benefits:

Immediate exchange of contracts
All contracts are prepared prior to the auction date and missives are concluded at the fall of the hammer.
With a sale by open market there is no guarantee that the sale will complete. Sales can also be secured under auction terms Pre and Post Auction, based on the unconditional auction contract.
 
Deposit Secured
A 10% non-refundable deposit is secured from the successful bidder at the auction and the purchaser is not able to withdraw from the purchase without the penalty of losing this deposit giving you security. The 90% balance is transferred between the solicitors at the completion date.
 
Competitive Bidding
In some cases an auction price can exceed the price of a negotiated sale. It is important to set the guide at a realistic price which is attractive to buyers. This will generate competitive bidding in the auction room, and ensure that the best price is achieved.
 
Encourage Buyer Decision
Auctions are a great tool for bringing a buyer to a point of decision. There is a fixed auction date and buyers are unable to postpone making a decision to purchase.
 
Speedy Completion
Quick disposal reduces long-term carrying costs, including taxes and maintenance. Standard completion of the sale is within 28 days of the auction day as per the general conditions of auction. An auction sale offers the avoidance of delays due to extended negotiations over purchase terms.
 
A Transparent & Open Sale
Property auctions are popular with vendors where an open and transparent method of sale is desired. Bidding is conducted in a public auction room. You can see who is bidding and how much they pay.
 
Intense Marketing
Auctions spend heavily on marketing, we maintain an extensive buyer base & provide unique high visibility signage. This ensures an aggressive marketing program that increases interest and visibility of your property.
 

Property auction advice from Lancaster and Kendal law firm

A residential property expert from Napthens solicitors, has given her top tips for selling property at auction:
Following an increase in popularity of the method, Amy Leslie, working out of Kendal, said that the number of properties sold via auction has increased recently, as both sellers and buyers have become more aware of its potential merits. There can be many advantages, but warns that there is work which needs to be done up front to prepare properly.
 
"Selling at auction may not be for everyone, but there are distinct benefits for those that decide to give it a go. The conveyancing process can be quicker, as the auction may take place a month after a seller has registered, with completion usually around 30 days after the auction date."

"Auctions can attract a variety of buyers, usually in a position to make a cash purchase. If there is a lot of interest, this can help achieve a higher price than on the open market. However, it’s important to remember that the proper preparation must be carried out ahead of an auction which can put many people off."
Larger organisations such as housing associations and property investors already buy and sell homes this way.

Ms Leslie explained that the key steps for selling at auction include;
- Check with the auctioneer as to the level of service provided for the fee being paid
- Decide whether there is to be a reserve price, which means a property cannot be sold for less than the agreed figure
- Involve a lawyer in the process as quickly as possible as they will need to check the auctioneer’s conditions of sale and draft a contract; and disclose relevant information such as title documents, search results and an energy performance certificate (IPC).
 
On the auction day itself contracts are binding on the fall of the gavel, with the buyer instructed to sign the contract and pay a 10 per cent deposit. Completion usually takes 30 days so both the seller and buyer will need to ensure they are ready to proceed.
 
Amy Leslie, Napthens Solicitors
 
 
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