Auctions are often used to sell property where the owner is not living in the property. There are a number of large auction houses which hold regular sales, sometimes lasting all day, when a large portfolio of property will be offered for sale. Some will be tenanted property sold as an investment property producing a given level of rental income. Others will be property being sold by the financial institutions which financed the original mortgage and where the borrowers were unable to keep up the repayments. The sale prices may sound cheap but such property is rarely in good order and may have been seriously vandalised.
You may find a bargain at such an auction but do take care. Our advice is that you should never buy anything at this type of auction unless you have had a full building survey undertaken first and know what you would be taking on. Unless pre-agreed you will be expected to pay a ten-per-cent deposit to the auctioneer with the balance due at completion a set number of days later – usually 28 days. There is no flexibility. That means if you have not sold your own home but want to buy at an auction you may need some form of short-term funding through a bank.
Sometimes a large house or country property will be sold at an individual auction. With adequate publicity it will be a successful event and establish a full market price.
The main point of an auction is that the final sale price is determined by the potential buyers bidding against each other – usually in public. The top offer is accepted when the auctioneer warns that he is about to sell the property and then drops his hammer. This action creates an agreement which is immediately binding on both parties.
Buying is one thing, but this is not necessarily the best way to sell a home since only a few people will be free to bid on any particular day as they must have their finance pre-agreed, and be able to go ahead immediately. In our experience a private treaty negotiation may well secure a better price.
Development land is often sold by auction and it could be an ideal way to sell second-hand goods and chattels. We can advise about local auction rooms which specialise in holding regular sales of this type.
This is a complex subject. If you want further
information we can put you in touch with a local specialist agency.