While property auctions can offer a faster and more convenient way to sell your home, a successful outcome isn’t always guaranteed. There are things you can do to stack the odds in your favour though...
This guide is designed to help you sidestep common auction mistakes and maximise your chances of achieving a great result when the hammer falls.
So, what are the top 10 do’s and don’ts of selling your house at auction?
Do your research, pick the right auction method and follow your auctioneer’s pricing tips. Present your home appropriately and be flexible with viewings. Don’t just go with the highest valuation or the cheapest fees. Don’t expect to receive full market value either. Avoid unnecessary repairs and don’t rush the process.
We’ve helped hundreds of home sellers successfully sell their homes at auction over the years. This article condenses over a decade of experience and sets out our actionable top tips to maximise your auction success.
If you want to find out quickly if auction is the right selling method for you, you can take our free quiz. If it is, we’ll put you in touch with the #1 Leading Auction House in your area.
Let’s start with the do’s of selling your house at auction…
1. Do your research when picking your auction house.
It is so important to do your research when picking an auction house.
Different auction houses specialise in different areas, price brackets, and property types. With more auction houses cropping up each year, it can be tricky to know where to start.
To help you narrow down your shortlist, we would always recommend that you do the following research…
- DO check out the auction house’s reviews. Reviews can be a good place to start with your auction house research. They’ll give you a helpful insight into the level of service and experience you can expect, but you shouldn’t rely on them entirely. Click here to read about the three things you need to be conscious of when looking at auction reviews.
- DO ask for an auction house’s “success rate”. An auction house’s “success rate” is the percentage of properties they sell (compared with the total number they take on). If an auction house has a low success rate, this can be cause for concern. They might be overvaluing properties to win business or might be taking on houses that aren’t suitable for auction just so they’re in with a chance of selling.
In the long run, picking the wrong auction house can waste your time and have a negative impact on your chances of selling in the future. So do your research before signing any contracts!
2. Do choose the right type of auction for your property.
There are two different types of property auction: traditional auction and the modern method of auction.
It is important to pick the right type of auction for your property. (We’ve written an entire article on this topic: What Types of Property Are Suitable For Auction?)
- Traditional auctions are most suited to “problem properties”, such as houses with ongoing subsidence, non-standard construction, fire/flood damage and so on.
- Modern auctions are most suited to “normal properties”, that are mortgageable, well presented, and ready to move into.
Traditional auctions and modern auctions each have their own set of benefits and drawbacks. One will be a better fit for your property than the other, so it’s worth having a chat with an auction house of each type.
3. Do take your auctioneer’s advice on the reserve price.
We recommend that you do listen to your auctioneer’s pricing advice. They are extremely experienced and will know how to price your property to generate the most interest.
Here are some things to consider when setting your reserve price:
- What’s the lowest price you need to achieve? For example, what amount do you need to cover your mortgage, fees, and subsequent plans.
- What’s the lowest price you’d really be comfortable with? Auctions do come with a bit of risk. You want to set a lower price to generate more interest. However, if the property doesn't get much interest (or if it wasn't worth as much as you'd hoped), it really might end up selling for the reserve price. So, pick a reserve price you’d be comfortable selling at.
If your property fails to get interest in the first couple of weeks of the auction, it could be a sign that it is overpriced. Be prepared to be flexible and consider reducing your reserve price at this point.
You can read more about how to maximise your auction sale price here.
4. Do present your property appropriately for the target market.
If you prepare your property correctly for your target market, it can increase your chances of selling your home!
So how should you present your home? It depends on who you think will be buying it and the auction method you’ve selected…
- Modern auction. Your buyer is likely to be a first-time buyer or family. Present your home in the best light possible to generate lots of interest (even if it means spending a bit of time and money in the short-term).
- Traditional auction. Your buyer is likely to be a developer or investor. Tidy and declutter but leave as-is. They are looking for an opportunity to add value, so don’t take that away from them!
5. Do make sure viewing arrangements are in place.
Do make it easy for buyers to view your property before an auction!
Viewings are key to fostering interest, building trust, ensuring informed bidding, attracting serious buyers, and potentially achieving a higher sale price.
It's an essential step in the auction process that can significantly impact your sale outcome.
Here are some of our top tips when it comes to viewing arrangements for auction:
- Allow viewings in the first place! Some sellers won’t allow buyers to view a property before the auction. This can raise suspicions and put potential buyers off, as buyers will be thinking you’re trying to hide something.
- Make the property as accessible as possible. Try and be as accommodating as possible when it comes to viewings. You want to get interested buyers in asap to maintain momentum. If you don’t live nearby, give your auctioneer a key.
- Give tenants sufficient notice. If you have tenants living in the property you’re trying to sell, viewings will be harder to organise. Make sure to give your tenants sufficient notice of any viewings and keep an open line of communication with them throughout the process. It is much easier to sell a property with a cooperative tenant than an obstructive one!
- Consider open houses. Open houses are convenient AND they drive competition. Seeing other interested parties during a block viewing creates a sense of urgency. This can often result in higher bids!
Now we know what you should do, let’s take a look at the “don’ts” of selling your house at auction…
1. Don’t just go with the auction house that gives the highest valuation.
Don’t just go with the auction house that gives the highest valuation. You may end up achieving less for your sale overall (if you sell at all).
Remember you’ll get less selling at auction than you would with an estate agent (unless you’re selling a problem property). If someone is selling you the dream and telling you you’ll achieve 90-100% of the market value, chances are they’re not being truthful.
If an auction house is selling you the dream and telling you you’ll achieve 90-100% of the market value, chances are they’re not being truthful.
Each auction house should be able to demonstrate how they came to their valuation. Ask each auction house to justify their valuation and request sight of any comparables they used in the process.
If you want a completely independent valuation from an auction house you can trust, click the button below. We only work with the best auction houses across the UK and will only recommend auction houses that are best suited to your property.
2. Don’t choose the auction house with the cheapest fees.
It can also be tempting to go with the auction house that charges the cheapest fees. However, “cheaper” can be costly in the long run.
Here’s a quick example...
So, picking the cheaper auction house might seem like a good deal at first, but it could actually end up making you less money in the end.
3. Don’t sell at auction if you need to achieve full market value.
Auction isn’t your best option if you need to achieve full market value for your property.
Properties in auction tend to sell for around 85-90% of what they would get on the open market. They can sell for as little as 70% of their market value but can also sell for as much as 10% more than market value in some cases!
If you need to achieve full market value, your only option will be to sell with a good, local estate agent, and wait for the right buyer to come along.
There is one caveat…if you’re trying to sell a problem property. In my experience, you are actually more likely to achieve a better price selling at traditional auction vs with an estate agent.
4. Don’t carry out any renovations if selling by traditional auction.
Selling by traditional auction? Let the bidders’ imaginations run wild, not your renovation bills!
Buyers at traditional auctions tend to be developers and investors who are looking for projects and ways to add value to a home. They won’t be put off by houses that need lots of work…quite the opposite in fact.
Don’t be tempted to start the work for them. Houses in need of complete renovation often generate the most interest.
5. Don’t rush the process.
It’s likely you’ve chosen to sell your house by auction for the added speed and convenience. But don’t be tempted to rush the process!
If you launch prematurely, it can undermine the process and be a momentum killer. And momentum is key to achieving a successful, speedier than usual sale…
One massive momentum killer is not having your legal pack prepared. Ideally, you want your full legal pack ready for when advertising starts.
Buyers do their due diligence before they bid. If you don’t provide a comprehensive legal pack, then buyers may assume the worst. You want to avoid anything that may discourage buyers from bidding.
If the legal pack isn’t ready on time, it might actually be better to delay your start date.
How we can help…
If you’re looking to save a lot of the homework, headaches, and guesswork, we can help…
Firstly, you can find out if auction is the best selling method for you by taking our free online quiz.
If you know auction is right for you, or you want to get an independent valuation from a trusted auction house, hit the button below. You’ll get a direct referral to our #1 Leading Auction House in your area, plus a no-obligation auction appraisal and free consultation.
By Matthew Cooper, Co-Founder of Home Selling Expert