Selling guide & buying guide for public auctions
A brief guide to public property auctions
Parrys hold regular auction sales at various venues throughout our region.
Public auction is an increasingly attractive method of both buying and selling residential property.
For the seller the main attractions are fixed timescales and that the amount of competition at sales gives the probability of a higher price than private treaty sales.
For the buyer it is a transparent process. The sale is binding at the fall of the hammer, the completion date is fixed and there is no danger of gazumping.
Selling a property at auction
Not all properties are suitable for sale by auction. We will be happy to advise, without any charge or obligation, whether or not your own property would be suitable.
From the date of instruction to the date of the auction we normally require a minimum of 6 weeks, but would recommend eight weeks, to market the property properly.
Our sales are usually held in the early evening at a local hotel, or suitable pub near to the property. Where possible we will combine your sale with sales for other vendors. This will both reduce costs and ensure a larger attendance at the sale which creates a better atmosphere ‘in the room’!
During our discussions we will advise the likely sale price and reserve. We will also advise as to our terms of business and discuss the costs of the sale.
You will need to appoint a solicitor at an early stage. Your solicitor will need to undertake all the work necessary prior to exchange of contracts, such as local searches, well before the date of the auction. Your solicitor would normally attend the auction. If your solicitor is based at a long distance we can help in finding a local solicitor who can attend for them.
Close to the date of sale, and often on the day itself, we will agree a reserve price for the property. This price, which is not disclosed to any third party, is the figure below which you will not sell. This reserve should always be the minimum which you are prepared to accept and not the maximum you hope to achieve.
When the property achieves, and hopefully exceeds the reserve price, it is sold and an immediate deposit of 10% of the sale price is paid by the purchaser. The remaining 90% of the sale price is paid to your solicitor on completion, which is normally fixed for 28 days after the date of the auction sale.
If a sale by auction is not achieved the property can be, and often is, sold privately immediately afterwards in the saleroom, or within a few days of the sale.
PARRYS conduct many auction sales during the course of the year. Not just for residential property but we can also arrange the sale of land, house contents, chattels, antiques and fine art. We can also advise on the sale by auction of all types of commercial property, both at our own local sales and via our excellent connections with national auctioneers in London.
For further information please contact your nearest office, or contact our senior partner John Parry FRICS on 01989 768484 – E-mail firstname.lastname@example.org.
Buying a property at auction
Buying property at auction is much less daunting than people think. Obviously, there are some important ground rules but once these have been grasped it is a very straightforward way of purchasing a property.
- You should speak to your solicitor who no doubt will be able to advise you fully on the procedure for buying at auction. He will also need to inspect the auction pack prepared by the vendors solicitors and advise you on any points that could cause concern. Once you buy at auction contracts are exchanged at the fall of the hammer. Neither you, nor the vendor, can change their mind!
- If you require a mortgage then you must have a mortgage offer in place before bidding at auction. For further advice on mortgages you should speak to your advisor financial advisor, or we can recommend someone.
- If you are a cash purchaser it is advisable to arrange a survey. Although we are surveyors we are not able to carry out the survey. We can give you a list of local surveyors or you should ask your solicitor to recommend someone they know.
- Buying at auction is, in fact, relatively simple and the auctioneer will make it clear throughout the sale where the bid is and there will be ample opportunity before the hammer falls for further bids to take place.
- Once the hammer falls then contracts are deemed to have been exchanged and the successful purchaser will be required to sign a contract immediately and give a deposit which will amount to 10% of the purchase price. This deposit can be by way of a banker’s draft, personal cheque or in cash. Credit cards are not acceptable. You should, therefore, ensure you have enough cash or a cheque with you and cleared funds in your account to cover the 10% deposit of your maximum bidding price.
- Please note that auction sales are normally subject to a reserve price. This is a price below which the property will not be sold and if no bid of the reserve price, or higher, is received the property will be withdrawn from the auction. If this does happen to a property in which you are interested it is always worth talking to the auctioneer who may be able to agree a sale to you in the room or a few days after.
We hope this covers the basics of the process but if you have any further queries please feel free to contact us and we will do our best to help.
If you are in any doubt or are still nervous about the bid process you should ask your solicitor to bid on your behalf or if he is unable to do so ask him to appoint an agent in the town to attend the auction for you.