Auction Sale - could it be the best approach for you?
Selling property by auction goes back many years, indeed legislation from over 160 years ago is still in place today. It is a proven method of achieving a desired result.
Here at John Goodwin we are able to provide specialist auction advice via our dedicated auction sales team.
Despite the current market conditions John Goodwin have held a number of very successful auction sales over the last 3 years with just 1 out of a total of 29 properties offered by auction failing to sell.
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The benefits of selling at auction
There are many significant benefits to choosing the auction route for sale and it is only by understanding these that we and our clients together can decide if the auction approach is right for a specific property:
There is no faster way of selling. The process can take as little as 6 weeks from instructing us through to an exchange of contracts. It is likely that you will be able to bank the proceeds of your sale within 10 weeks from the commencement of marketing.
Chance of success
Auction gives you a greater likelihood of selling your property than by private treaty. This is apparent by the exceptional success rate enjoyed over recent years.
If you need a certain sale then the auction route should be considered.
High Profile Marketing
Your property will be advertised very intensively in the local and regional press and, if necessary, nationally through specialist publications that may target very specialist buyers, investors or professional buyers.
This is in addition to our usual extensive marketing to registered applicants and promotion via a number of very prominent websites on the internet including rightmove.
The aim of an auction sale is to generate interest from 2 or more prospective buyers and to encourage them to bid against each other. The process of competitive bidding will help your property to achieve best price on the day.
Sometimes buyers are so anxious to acquire a property that they put in a very strong pre-auction offer. If in our opinion that figure is unlikely to be reached or surpassed in the auction room we will recommend its acceptance under auction rules with a condition that contracts are exchanged prior to the auction day allowing sufficient time to cancel the auction.
Often properties achieve a sale price at auction in excess of the guide price. Regularly the result is ahead of that which might have been acceptable with a private treaty sale however you can always be sure that this has achieved its best price on the day.
This is particularly important on probate properties where executors are required to achieve ‘best price’.
Unfortunately with private treaty sales the price agreed often is not the price you finally receive.
With an auction there is no re-negotiation, no discount to take account of survey findings or any last minute gazundering.
Chance of success
Assuming a realistic approach to both guide price and reserve a sale by auction gives you a greater likelihood of selling your property than by private treaty.
This is evidenced by our success rate during the difficult market of 2008 when we sold all but 1 of the properties offered for sale.
If you need to achieve a certain sale within a finite time scale the auction option should be a high priority.
If you are in a hurry or have a deadline to meet then auction could well be right for you.
At the outset you will know the date of the auction and legal completion will usually be set for 28 days thereafter.
Financial pressures, concerns about the deterioration of a property, the need to relocate or the benefits of winding up a deceased estate within a specific timeframe can easily be accommodated.
A wide range of properties are suitable for auction sale
There are many different types of property that sell well at auction and if you have one that falls into any of these categories you should certainly consider the auction route:
Properties for improvement-
- Properties in need of updating make ideal auction lots.
- There are good levels of demand from builders and developers or from private buyers keen to undertake a project for their own occupation or resale.
- Properties of this type also appeal to buy to let investors who may carry out the improvements with a view to retaining the property as part of a property portfolio
- Residential houses and flats with tenants in residence sell well at auction. With interest rates at a record low, sophisticated investors are looking very actively at both residential and commercial investment opportunities.
- In the commercial sector retail shops, offices, industrial units, garage blocks and parking areas are all types of investment opportunities which can be very effectively sold by public auction. It does not matter whether they are vacant or tenanted we have a large number of investor clients who will consider all types of commercial investment.
- Derelict or disused farm buildings, empty commercial premises and buildings with potential for conversion or change of use can all sell well at auction.
- The development opportunities are not always obvious and the auction process will expose the development proposition to the widest possible audience.
- There is no better way of ensuring a seller achieves best price for a building plot or parcel of development land than to offer it for sale by auction.
- Builders and private individuals alike are able to consult with their architects, planners etc. and be ready to bid up to their maximum in the auction room.
- Some exceptional results have been achieved for building land even in the most difficult market conditions.
- Pinpointing the value and ensuring the best prices achieved for the most individual properties is extremely difficult and this is precisely the type of property that often performs best in an auction environment.
Amenity land and other property-
- We have enjoyed considerable success with sales of paddocks, amenity land, woodland and even fishponds!
What to do next:
The steps to a successful auction:
A member of our auction team will be delighted to pop out and meet with you to discuss the suitability of your property for auction
Instruction to sell
Assuming that we are then instructed to proceed we will confirm our terms of appointment and discuss with you a suitable guide price
Liaison with solicitor
We will immediately contact your solicitor to brief them fully regarding your intention to offer your property for sale by auction.
Your solicitor will need to prepare a sale contract which will include a home information pack, energy performance certificate together with searches, copies of planning permissions, specialist reports, tenancy agreements, architectural plans etc.
We will agree a suitable auction date with your solicitor to ensure that there is sufficient time for the preparation of the contract and also to ensure that your solicitor is available to attend the sale.
Preparation of sale particulars
We will prepare high quality sales particulars and once the draft has been approved we will ensure that these are distributed to all registered applicants.
Particulars will also be uploaded to our website and other internet portals.
Effective marketing campaign
Your property will be advertised extensively in local regional and national publications including any appropriate specialist advertising. The extent of advertising would be agreed with you at the outset.
Viewing and open days
Where appropriate we will organise special open days and ensure that an experienced and well briefed member of our auction team will be present where necessary.
We will monitor carefully all of the interest expressed in your property during the marketing period in order to be able to advise the optimum figure as a reserve price immediately prior to the auction day.
We may have received pre-auction offers and these would need to be taken into account. Occasionally a pre-auction offer may be so attractive and unlikely to be surpassed in the auction room that we recommend its acceptance conditional upon an exchange of contracts to allow sufficient time to cancel the auction.
The reserve price remains confidential between you and us.
Time is allocated prior to the start of an auction for prospective buyers to ask any last minute questions. At that stage we will also circulate any final amendments to the contract details.
Hopefully after competitive bidding the property will be sold with contracts effectively being exchanged at that point. The contract is signed in the sale room and a 10% deposit paid.
Your solicitors will handle the process from then onwards. Completion date is typically 28 days following the auction sale although in some instances can be earlier by mutual agreement.