London Property Auctions

Guide to London property auctions

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When you’re looking to quickly sell your house or flat in London, you might be tempted to use a London property auction. Although selling this way can make it more likely you’ll find a buyer, there are some important pros and cons of home auctions that you should know before deciding to sell.

What is a property auction?
What are the steps involved with a property auction?
Choosing a London property auctioneer
What are the costs for selling at a London property auction?
Who are the main London property auction houses?
Questions to ask a London property auctioneer
Tips to help you prepare your property for auction
What are the advantages and disadvantages of selling your home at an auction?
What is the average timeline for selling your home through a London property auction?
What types of residential property can be sold at a London auction?
Top questions and answers about selling your home at auction

What is a property auction?

Homeowners looking to sell their properties typically have three methods from which they can choose; use an estate agent, use a fast cash home buyer, or use a property auction.

Estate agents are the most traditional method of selling, through which they will market your home and arrange viewings for potential buyers to tour it before deciding whether they want to make an offer to buy the property. But selling this way can be a very lengthy process and take many months, and you’ll also have to pay the estate agent a potentially large fee for selling your home.

Fast cash home buyers such as LDN Properties are another option, and they can help you complete a sale – including the exchange of contracts and paying the proceeds to you – within a few short weeks, with the added bonus of not having to pay them any fees.

In contrast, at a property auction you will enter your home for sale and agree to a minimum reserve price. This is a value for your house or flat at which you agree to a binding sale if someone at the auction makes that bid. If your home does not receive the minimum bid then it will not sell. The goal at a property auction is to have many people interested in buying your home so that they keep trying to outbid each other with ever-increasing prices. This means that the eventual winning bid could be much more than the reserve price, boosting your sale profit. If you are considering selling at auction, AuctionLink have a complete guide covering all aspects of selling your house by auction.

The team at LDN Properties have also written a complete guide on how to sell your house at auction and are happy to assist if you decide this is your best option.

Much like estate agents, property auctioneers will charge you fees for selling your home. This covers the cost of the work that they do in marketing your home and hosting the auction. Although you will have to subtract this commission from the total profit that you’re able to make from the auction, you might be able to ask the auctioneer to pass these costs on to the winning high bidder.

What are the steps involved with a property auction?

When you are ready to sell your London house or flat at a property auction, do some research online to see the ratings and sale histories of the various auction houses in the city. It’s important that you find an auction house with which you are completely comfortable.

Auction houses will typically have a deadline for entering homes into an upcoming auction between three and four weeks before the event takes place. Submitting your home for a property auction is relatively straightforward, as you simply contact the auctioneer, sign the relevant documents to enter your home for sale, and then wait until the auction.

In the time between signing those documents and the auction taking place, the auctioneer will take care of marketing your home and organising viewings where prospective buyers will be able to view it. This gives them the chance to see the property in person for a better idea of whether they would like to make a bid to buy the home on the day of the auction.

On the day of the auction, the auctioneer will announce your listing and the opening minimum reserve bid. If your home receives at least that bid then it sells, and a winning bid at auction is considered to be a legally enforceable agreement to buy the property.

If the auction is completed successfully, the buyer will then sign a contract to buy the home and will pay a deposit of 10 percent of the final sale price. Then you will exchange contracts with the buyer, until the final step of the process when you receive the proceeds.

It will take at least four weeks after the date of the auction for completion of the necessary legal paperwork until the purchase is completed, and sometimes even longer.

Choosing a London property auctioneer

Just as with choosing any kind of service, you should do extensive research about London property auction houses before you settle on using a particular company.

Search online to find out the ratings and reviews of the auction houses with which you’re interested in doing business. This can be useful to tip you off to any alarming negative reviews or to show you that a particular auction house is reputable. Internet searches also can alert you to any news articles that might highlight the pros or cons of a certain auction house.

Costs of selling at a London property auction

What are the costs for selling at a London property auction?

The total costs of selling your house or flat through a property auction are somewhat the same as if you tried to sell your property using the services of an estate agent.

The biggest cost will be the commission that the auction house charges you, which you can expect to be typically between two percent and three percent of the final sale price that your home gets at auction. You’ll also have to pay VAT on top of that commission.

In addition, some auction houses might charge you an initial fee for listing your home in their property catalogue and this can cost you about £300 plus VAT. But you might be able to make payment of this charge conditional upon your home selling on the day of the auction.

Another cost of selling your home at a property auction is a necessary legal pack that contains all the relevant legal paperwork. Your solicitor will have to complete this pack before the auction, and this will cost about £200 or potentially more and must be paid before the auction occurs.

London property auction houses

Who are the main London property auction houses?

There are 16 leading property auction houses in London, and you should conduct sufficient research into each of them before deciding which one to choose for selling your home.

Questions to ask a London property auctioneer

Before you decide to sell your London house or flat at a property auction you should make sure that you have properly assessed all of the various pros and cons. It can be helpful to have a conversation with the auctioneer to ask them important questions that might give your information that helps you to make the final decision on whether to sell your home through them. Below are some of key questions that you should ask your property auctioneer.

Can you sell my particular type of property?

It’s possible that the auction house you’re interested in only handles certain types of houses or flats, so check whether they can sell your particular type of home.

What fees will your charge for auctioning my home?

This is a vital question so that you know the total fees that you will have to pay selling through an auction, and how that might affect your final sale profit.

What is your success rate with London property auctions?

Ask the property auctioneer for details on past auctions for homes similar to yours, which will help you learn more about their overall success rate and reputation.

How will you market my property ahead of the auction?

The skilled auction houses can share with you the steps they will take to market your home, and you shouldn’t use an auctioneer who has no clear advertising plan.

How will you organise the viewings for my London property auction?

This can be a useful question for you to discover the general timeline and number of viewings that the auctioneer plans to host ahead of the auction for your home.

Will I have the final say on the reserve price for my home’s auction?

This is a very important question because you should never allow an auctioneer to pressure you into accepting a reserve price that’s lower than you can afford.

Am I able to pass some of the auction fees on to the winning high bidder?

Some auctioneers allow you to pass certain fees on to the winning high bidder to pay, which can help you to save money and boost your overall profit from the auction.

Video summarising the questions you should be asking when considering a London property auction

Be sure to watch our short video summarising some of the key questions and queries you should be making when using a London property auction.

Tips to help you prepare your property for auction

Although a property auctioneer will take care of the major tasks involved with selling your home, such as marketing and scheduling viewings, there are still some easy steps that you can take prior to the auction occurring which might help to increase your chances of a successful auction that secures a great sale price for your house or flat. Find out more about property auctions in your area at Auction Compare.

Before the viewings, you should tidy your home and remove any clutter from rooms so that they look as spacious as possible (particularly if you are selling a hoarder property). You want your property to be as attractive as possible to people coming on viewings, and cluttered rooms can make the home look smaller and less desirable.

Similarly you should make sure the exterior of your house or flat is in great condition, so if necessary give your door and window ledges a fresh coat of paint and fix any roof problems. If you have a garden or yard you should also make sure it’s in great condition, and mow the lawn if you have one in order to make a great first impression ahead of the viewings.

London red brick flat going to auction

What are the advantages and disadvantages of selling your home at an auction?

As with other methods of selling your property, there are certain pros and cons of selling your home through an auction. Whether you decide that an auction is right for you will be a decision that you’ll have to make based on your personal situation and how quickly you want to sell.

Advantages of selling your home through a property auction

Certainty about when your property will sell

One of the most stressful aspects about putting your house or flat up for sale is wondering whether it will attract any interest from buyers. Indeed, selling your home through an estate agent can be a lengthy process and your home might remain unsold for many months and sometimes more than a year – a long time despite most people wanting to sell quickly.

But selling your home through an auction provides significantly more certainty about selling as well as a faster timeline for doing so. The date of the auction tells you exactly when your home will be open to bids, and if you receive a bid worth at least your opening minimum reserve price then that is considered to be a legally binding agreement to purchase your property.

Finding a buyer for a home that’s hard to sell

Selling at a property auction can also be a viable way to find a buyer for a property that might struggle to sell through other means. For example, homes with structural problems can be difficult to sell using the services of an estate agent. But auction houses know exactly how to market and generate interest in such properties in order to attract a decent sale price on the day of the auction.

Potential for making a significant profit when selling your home

When an auction takes place, people who are potentially interested in buying your home will decide whether to bid on it. If your house or flat is particularly attractive to buyers then this might trigger competitive bidding, in which several people attending the auction in person or online try to outbid each other by making ever-increasing price offers to buy your home.

If this happens then in the best case scenario the final bid to buy your property might be significantly greater than your opening reserve bid. This means you could make a profit selling your home through an auction compared to other methods.

Disadvantages of selling your home through a property auction

Potential for a lengthy wait to sell compared to using a cash home buyer

Although selling your home through an auction can be much quicker than using an estate agent, there can still be some delays involved – particularly compared to selling your home to a fast cash buyer such as LDN Properties that can complete the sale in just a few weeks.

That’s because there’s often a delay of several weeks between the date that you enter your house or flat for sale and the date that the auction takes place. And even if your home successfully sells at auction, you will still face a wait of many more weeks whilst your solicitor works to complete all of the legal paperwork, including exchanging contracts.

Uncertainty about the exact price you’ll be able to get for selling your property

An auction effectively comes down to how many bids your home will receive from potential auction buyers, and unfortunately there is the risk that you might not receive any bids on your house or flat. If that happens then you will have to consider whether to re-enter the home for sale at another future auction, or whether you should pursue another method for finding a buyer for your property.

And although some homes sold at auction can achieve a sale price that’s much higher than the opening minimum reserve bid, there’s also the chance that you only receive one bid to buy your home. If that happens you’ll have to settle for receiving the reserve price, so be sure to set that value at a level that you can afford and that will still earn you a profit from selling your home.

Timeline of London property auctions

What is the average timeline for selling your home through a London property auction?

Although every home sale is unique, it’s possible to provide a general timeline for how long it might take you to sell your house or flat if you decide to use a property auction. You can expect the entire process to take around two months until contracts are exchanged.

Timeline for necessary planning before the auction

The act of selling your home through an auction begins roughly six to eight weeks before the date that the auction is scheduled to take place. This amount of time is necessary for you to plan for a successful sale and to let your tenants – if you have any – know about your plan for selling the home. It also gives you plenty of time to contact your solicitor who will be able to start work on preparing the various legal documents that are required when selling your home.

Most London auction houses set a deadline for entering your home for sale at four weeks before the auction is scheduled to take place. At this time you will be expected to have approved and signed off on the auction contract that the auction house will submit to your solicitor.

About three weeks until the auction is scheduled to take place, the auction house will already have started to market your property. There are several methods that auctioneers use to generate interest in houses and flats that they are selling, including advertising them on property sales websites such as Zoopla and Rightmove, or posting ads in the local newspaper. They will also send their auction catalogue to any email and physical mail lists that they might have, all designed to hopefully generate interest from people that might want to bid on your home.

This is also the time at which the auctioneer will be organising viewings where prospective buyers can visit and tour the insider and outside of your home. This is a great chance for them to decide whether they actually want to make a bid to buy the house on the day of the auction.

Roughly one week before the scheduled auction, the auctioneer should let you know how much interest your sale listing has attracted. This can give you a good idea of how successful you might be at getting more than your minimum reserve bid price when the auction takes place. In certain situations, if your house or flat has received minimal or no interest from potential buyers then the auctioneer might recommend that you remove your home from the auction. You could always try again in the coming weeks or months when you might have more luck.

Timeline for the day of the auction and after a successful sale

The auction should typically take just one day, and there’s not requirement that you as the homeowner need to be present in the room when the event happens (or indeed online as is the case for a large number of auctions now). Most London auction houses presently are able to livestream their auctions so you can track it online. Auctions for an individual home can take anywhere from half a minute up to about three minutes.

If your home receives at least the minimum reserve price bid then it will be considered sold, and the winning bid will be seen as a binding agreement to purchase your home.

Once the auction is complete all that’s left is the various necessary legal documents to complete the sale. You can expect this part of the process to take at least three to four weeks. During this time you can pack up and vacate your home so that you are ready to move out once the sale is complete and you receive the proceeds from the buyer.

Types of property sold at auction

What types of residential property can be sold at a London auction?

The great news is that practically any type of house or flat can be sold at a property auction, including flats with tenants and other types of property that might struggle to sell through an estate agent or other options such as a cash home buyer.

Homes in poor condition or poor locations

If you home has a “problem” condition, such as the use of non-standard construction material, the presence of the invasive species Japanese knotweed, structural integrity flaws, damp, or any other potentially negative attributes then it might be difficult to get an offer to buy the house if you sell it through an estate agent.

Similarly, homes that are considered by some people to be in poor locations – such as under a flight path or in a flooding zone – could also be hard to sell using the services of an estate agent, particularly if they are not used to selling such homes.

But auction houses will not place any restrictions on selling such homes, and indeed for many people that own such properties, using an auction is their preferred method.

Homes inherited through the probate process

If you’ve inherited a home through the probate process, you might find that it’s difficult to get interest from potential buyers because the property may for example have only have a short lease remaining. Thankfully, the sale of short lease homes at auctions is common, so this can be a viable option for trying to sell your home and still receive a decent sale price.

And if you are the executor of a will who is responsible for selling it, finding a buyer through an auction can be a great way to satisfy the requirement that the probate property be sold through an open and fair sale that aimed to achieve the best possible price.

Homes that currently have tenants

If you’re the owner of a home that you currently rent out to tenants, there may not be many estate agents that will know how to sell this kind of specialist property. That’s because the best buyer is likely to be someone looking to purchase the home as an investment opportunity and who will allow the tenants to remain in the house or flat.

Because there are few estate agents that specialise in selling homes that already have tenants, a better option could be to use a property auction. London auction houses have plenty of experience in selling such homes, and they will know the right way to market your tenanted property in order to generate decent interest ahead of the auction.

Homes that have particularly unique characteristics

If you own a house that’s in good condition, but that has a particularly unique design such as an unusual shape or size, it could make it harder to find a buyer through an estate agent. That’s because your estate agent might not know how to suitably advertise and promote interest in the home, and it might go unsold for many months.

But property auction houses have years of extensive experience with selling every type of home imaginable, some with incredibly one-off designs. They will have the skills necessary to ensure you’ll have the best chance of receiving bids on the day of the auction for your unique home.

Undeveloped building plots and other types of land

If you own a piece of undeveloped land, regardless of whether it has planning permission or does not, then a property auction could be your easiest method for finding a buyer at a competitive price. And it doesn’t even have to be a large amount of land, because even small plots can attract high prices at some auctions from people looking to build on the land.

Selling land through an auction house can also be significantly quicker than trying to do through so a private estate agent sale, because the latter process can include several complications that might take many months or longer to fully resolve.

Garages

Whilst you might think that property auctions can only be for London houses and flats, they are also a viable way to find a buyer for a stand-alone lockup garage. Many estate agents might be unwilling to sell garages because of a lack of experience in doing so, but auction houses in the city have sold many of these units.

As a general guideline you could expect bids between £10,000 and £20,000 for a lockup garage in many parts of London, but the closer that you get to the centre of London then the prices will increase and some garages might even sell for £100,000 or more.