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Quick House Sale Guide >> Selling Your House At Auction >> Pros and Cons of Selling at Auction
Pros and Cons of Selling at Auction
The pros of selling your house at auction include:
- The speed of the sale. Once you have instructed an agent to go ahead and market your property to be sold at auction it can take as little as 5 or 6 weeks until completion. This is more than half the average time taken to sell using more traditional routes.
- As soon as the hammer comes down at the auction you have exchanged contracts and the buyer is legally bound to buy the house at the price agreed. The price cannot be altered and neither the buyer nor seller can back out of the sale, unlike more traditional selling routes, where 1 in 3 sales fall through after an offer has been accepted on a property.
- You set a reserve price, which is the lowest price you will accept for your property. At an auction there is much potential for the price to end up much higher than the reserve price.
- You will not usually have to pay any commission if the auction is unsuccessful, i.e. the reserve price is not reached. Although you may have to pay a listing fee for the property.
- It is easier to sell a more difficult property or one that is hard to value at an auction than through an estate agent.
The cons of selling your house at auction include:
- If your property does not meet the reserve price you set you will be left with your property unsold and will either need to wait a number of weeks for the next auction or look into other routes for selling. This will mean you will not get a fast house sale.
- You will only get the best price for your property from the people in the auction room on that day.
- Once the bidding on your property exceeds the reserve price and the hammer comes down on a final bid you are deemed to have exchanged contracts and are legally bound to go on to completion. You cannot back out or try to renegotiate the asking price.
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