Auctions often aren’t considered as the mainstream method to sell property throughout the UK, as sellers tend to use more traditional approaches such as estate agencies and brokers.
Whilst estate agents and brokers may work for some sellers, there are a number of benefits that are missed out in comparison to selling property via an auction.
Key benefits of selling property via auction
Funds often are available
Commonly, every buyer wants their property to sell as quickly as possible — and that’s exactly what buying at a property auction has the potential to offer.
Given the fast-paced nature of auctions, the type of buyers that you’d often find are those that already have the finances available, ready for speedy completion. This is often the case, as buyers are often required to put down deposits with auction houses, prior to bidding on lots in order to prove their position and seriousness.
In comparison to traditional estate agencies, you might tend to find a lot of first-time buyer offers that don’t have their funds formally secured. Therefore, potentially making the entire sales process come to a halt, should the buyer’s offer fall through.
Fear of missing out (FOMO)
Naturally, with any property sale, either through an auctioneer or estate agency, other buyers competing to purchase the same property can often be a fear from the buyer’s perspective, which can help to speed up the sales process.
In the seller’s interest, auctions in particular naturally tend to accelerate this — given that there’s often early due diligence, other cash-ready buyers and time-sensitive lots, all of which help encourage buyers further in order to act fast or miss out.
2. Competitive sale prices
Oftentimes, properties on auction tend to have a guide price associated with them. This is generally the seller’s minimum expectation which can be used as a ‘guide’ for buyers to use when placing bids.
Depending on the property’s demand, a property can have multiple bids, each having the potential to fuel other buyers’ bids higher and higher — thus, making the sale more competitive and advantageous for the seller.
Usually, properties listed on auction require a deposit in order to let buyers place bids. However, if for any reason a buyer can not complete and there is more than a single bidder for the same lot, then there is still a chance for the second-highest bidder to complete on the lot instead — giving the seller better security of completion.
Whilst traditional marketing for estate agencies may result in a majority of walk-in buyers through shop window displays and online property listings, property auctions such as Barney Estates & Auctioneers tend to have a collection of ready buyers within an email list — ready to send newly ready-for-auction properties to.
This article is purely speculative and should not be mistaken for financial advice. Readers should consult a professional independently before making any financial decisions.