Buying and Selling at Auction
Most estate agents do not sell property by public auction because it is a specialist activity and not every type of property is suitable to be sold under the hammer.
Why take a property to auction and what sort of property should be sold this way? To have a successful auction, market conditions and type of property must be right.
The power of the auction and adrenalin created in the auction room, particularly with a property in serious demand, can dictate that purchasers bid more than they intended, to the vendor’s benefit. In the past 12 months our Banbury office have sold over £13 million worth of property this way – and in most cases achieving prices well in excess of the likely private treaty price.
So what types of property are best suited to this market? It would be very unusual, even in a bull market, to sell a four bedroom detached house on a large housing estate this way.
However the following are suitable for auction:-
• Cottages and houses for restoration
• Agricultural and amenity land
• Building sites
• Barns with planning consent for conversion
• Property on behalf of Local Authorities, Trustees or Charities
• Investment properties
• Repossessions
The biggest advantage of all to a vendor is the certainty of sale on the day – although of course there will be a reserve price which if not reached can mean the property is withdrawn, with a sale often negotiated afterwards.
There are many other advantages too, particularly as everyone is working from a level playing field and anyone can bid as long as they have done their homework and got their finances sorted in advance of the auction date.
This type of sale is often favoured by Executors who have to be seen to be completely fair and open. It prevents gazumping or the purchaser equivalent.
Another big advantage is that all documentation is prepared in advance of marketing taking place. All contract documentation, searches, pre-contract enquiries and all relevant information is prepared before marketing commences.
The vendor’s solicitors will provide on request an Auction Pack, giving details of title, pre-contract enquires, searches etc. This method avoids the frustrating period of time that can arise after a sale has been agreed by private treaty whilst the legal issues are resolved.
There is likely to have been dialogue in advance between the vendor’s solicitor and prospective purchaser’s solicitors. Any final questions can be addressed before bidding starts in the sale room. Remember the vendor remains in control until the fall of the hammer.
For those wishing to purchase a property at auction then ensure that you have done your homework first, decided on your top bid, ensure your finances are in place and above all be sure that you are in a position to complete the sale – normally no more than four weeks after the date of auction.
For further advice please contact Paul Clayson or Charles Haselwood at Fisher German's at the Banbury office. Tel 01295 271555.
- Ashby de la Zouch
- 01530 412821
- Banbury
- 01295 271 555
- Knutsford
- 01565 757970
- Market Harborough
- 01858 410 200
- Newark
- 01949 851815
- Southampton
- 02380 883150
- Stafford
- 01785 220 044
- Worcester
- 01905 453275
