Property Auctions in UK: What to Expect

If you're considering property auctions in UK as a way to turn a profit on a residential property, it's important to realize that this can be quite an involved process if you choose to do it yourself. Many sellers opt to use a property auction, which offers a more streamlined transaction. Here's some basic information about the services that you can expect to receive from a reputable property sale auction house.

Setting the Price and the Reserve

Every successful auction starts with setting a reasonable selling price. In order to do this, the auction house should perform an appraisal of the property. Since some properties are not suitable for auctions, the auction house should be honest enough to inform you if this is the case. Once this "guide price" is set, you'll also need to set a "reserve price." This is the minimum amount you will accept for the property, i. e., the amount at which bidding must start. Your reserve price should be reasonable, however. Don't forget to inquire as to the percentage of the price that the auction house will take as a commission. Expect the commission to range from 1% to 2% of the selling price, plus VAT. Be sure your guide price is reasonable and reflects current market prices in order to attract as many potential buyers as possible. Your reserve price should be reasonable, however.

Don't Forget the Catalog Listing Cost

Since every auction provides an informational catalog to the bidders, you may incur a catalog entry fee that will cover an inspection of the property and any costs associated with producing the catalog. The fee is variable and depends on how much space you wish to occupy in the catalog. Expect to pay £250 to £450 plus VAT for your UK property auctions guide or catalog listing. It's also a good idea to make the catalog listing available on the Internet, so be sure auction house can do this. In addition, the auction house should provide you with an agreement that details all these factors. Once you sign the agreement, you're legally bound to complete the transaction.

Be Sure to Budget for the Legal Pack as Well

Another important component of an auction for houses and other property sales is called the "legal pack." This is a collection of all the documents relevant to the property including special conditions of sale, survey, title, searches and planning documents. The legal pack should be made available to prospective buyers on request.

Frequent Viewings are Also Vitally Important

Remember that the best way to sell a property is by letting prospective buyers view and tour it. This is usually done by appointment, and should be a part of the services offered by the auction house, which should log all viewings and inquiries and make the log available for your review. Once the property sells, the buyer signs a legally binding contract and places a 10% deposit. The balance is due within 20 working days.

Since the sale any property starts long before the day of the auction, be sure to choose a full-service property auctions in UK auction house that can provide these and many other services designed to facilitate a profitable and trouble-free transaction.

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