If you decide to sell your property at auction, you’ll need to choose whether to use the “traditional” or “unconditional” method, or the “modern” or “conditional” method.
Both approaches require you to register with your chosen auction house and to undergo identity checks. You will also need to provide proof of your ownership of the property and to instruct a solicitor to put together a “legal pack” containing all of the particulars required for the sale.
You will also need to set a “Guide Price” - which is a figure that is visible to the public and helps potential bidders to decide on a sensible offer - as well as a “Reserve Price”, which is kept private between the seller and the auctioneer and represents the lowest acceptable bid.
You may also be required to make the property available for potential buyers to view - but you may be permitted to arrange this in “blocks”, with multiple visitors at a time, to make matters more manageable.
However, the two methods of auction differ significantly from here on.
When selling via traditional auction, a specific date and time will be set on which potential buyers may bid on your property. The highest bidder that surpasses the reserve price with their offer will automatically enter into a legally binding contract as soon as the “gavel falls”.
The same day, they must pay a 10% deposit. They will then have a period of time - usually 28 days - to complete the transaction.
When selling via the modern method of auction, your property will usually be listed online. Potential buyers may bid on the property for as long as the listing is “live” - which may run to a period of 28 days or even longer.
Once bidding is closed, the winner is required to pay a 5% “reservation fee”. They are then granted a period of time during which to get their affairs in order in preparation for the purchase. This may include:
- Instructing a solicitor
- Applying for a mortgage
- Arranging valuations, checks or surveys
This period is usually around 28 days long, but may vary between auction houses. At this point, the buyer is usually expected to pay a 10% deposit and exchange contracts. They then have another period of time - often a further 28 days - to complete.
This type of auction process is often referred to as a “conditional” method, as the highest bidder does not enter a legally binding contract until they exchange. This means that they may still drop out of the purchase - though, if they do, they will lose their reservation fee and any deposit.
Both of these approaches tend to be faster than a standard estate agency sale, and the traditional method is significantly more secure.
However, if you are interested in an even faster turnover with greater security, you may prefer to opt for a fast house sale via a “we buy any house” company.