Selling your house is one of the biggest financial transactions you’ll ever make, so you want to get the best price possible for your home. This is why it’s usually critical to present your home the very best it can be when you come to sell.
But should you prepare your home for sale at auction?
It depends who you think will be buying your property. If it needs total refurbishment or redevelopment it’s best to sell your house as-is. However, if your target market could be a first-time-buyer or family you should present it the best you possibly can.
Making the right decision can be worth thousands of pounds in either direction, so it's a decision you should consider carefully before your auction goes live. It all comes down to who you expect to buy your property at auction.
1. Consider your target market
Different buyers are looking for different things when they buy a home. Let's consider a couple of quick examples.
- Property developers are looking for opportunities to add value to properties. The more there is for them to do, the better. They also tend to be very passionate about property development. This means that having the opportunity to take on a "big project" and turn it around is appealing for them.
- Young families tend to be the total opposite. They'll often want to move into a property and have as little to do as possible. They certainly don't want months of DIY before they can really settle into the property.
The way you should present your property to each type of buyer varies because they're looking for totally different things.
So the first thing you should do before considering how to present your property for auction is to work out who your target market are.
1.1. Who is my "target market"?
In our article about types of property suitable for auction we identified 3 main "types" of auction properties:
- "Problem Properties". These are normal residential houses but with some issue that makes them unsaleable to ordinary buyers. (For example, issues like Japanese Knotweed or subsidence, which can make a property unmortgageable).
- Non-Residential Properties. These are things like commercial properties, land or development sites, freeholds and so on.
- "Normal Properties". These are normal residential houses that could easily be sold through an estate agent. Selling this way can take a long time though, so it can make sense for these sellers to choose modern method of auction instead.
Considering the type of property should tell you who your target market will be.
Who buys "problem properties" and non-residential properties at auction?
Buyers of "Problem Properties" are more likely to be developers or investors. This is because the properties are often unmortgageable, meaning ordinary buyers can't purchase them. An investor will often buy with cash, develop the property, and sell it on for a profit once the issue has been rectified.
Buyers of non-residential properties are likely to be developers or investors too.
Who buys "normal" properties at auction?
It's a different story for "normal" properties though. If you don't have any major issue with your home you may be choosing auction because of the speed and certainty it offers you. If this is the case, there's a good chance you may end up selling to a first time buyer (FTB) or family.
The way you should approach presenting your property will vary depending on the buyer.
2. When selling to FTBs and Families...
So, your property doesn't really have anything "wrong" with it. You may have just chosen auction because you want the a faster and more certain sale than choosing an estate agent.
If this is the case we'd usually recommend selling by modern method of auction (MMoA). This is because you can sell to mortgage buyers via MMoA. Mortgage buyers include FTBs and families, and are the types of buyers who typically pay the best prices. You can't really sell to mortgage buyers at a traditional auction because they won't have time to arrange finance.
If these are your potential audience then you should present your property in its best light possible.
2.1. How to present your property for sale
In a nutshell, all the usual rules about presenting your home apply. It should look its best for the marketing photos as well as for the actual viewings.
Check that out for the in-depth guide on what you need to do.
2.2. Spending a little time and money can be worth it
Although it'll take time and a bit of money to do, it can really pay you back well. Completing small jobs and trying to present your home beautifully won't only make people happy to pay more, it'll actually encourage more people to bid. When selling by auction that's where the real money is: The more bidders you have competing for your home, the higher price you'll get.
This is why you should really go all-out with the presentation if your target market is a first-time-buyer or family.
3. When selling to investors and developers...
If you have a problem property - which includes selling very run-down properties - then how should you present it?
The best idea is actually to do nothing. Well, almost nothing. You should tidy up. Simply clear the property of any clutter by throwing everything away.
3.1. Sell the property as-is
Property developers are looking for two main things: A project they can renovate and "turn around", and scope to add value. Developers enjoy this process, and it's how they make their profits.
If you try and do some of that renovation work before selling then you're taking that away from them. This can actually lead to fewer interested bidders in your auction.
SDL Auctions are one of the largest auction companies in the UK. In their "Property Auction Do's and Don'ts" article they say:
"Don't carry out any refurbishment works. Quite often the best-selling properties are those which require improvements... Buyers are looking for a property they can add value to, and therefore those properties that need renovation and refurbishment often peak their interest the most."
Our experience is certainly the same. Auction buyers are looking for projects. Don't take that away from them by starting the works yourself!
"Buyers are often on the look-out for renovation projects. If you've got a property in need of significant repair, auctions are the place that people go to find them."
If you spend time and money fixing issues and doing light renovation work it can be bad in two ways:
- You may not get back the amount of money you put in,
- You may end up with fewer bidders overall. This in particular can have a huge detriment on price.
How you should prepare your auction home for sale depends on who your target market is. Preparing your property incorrectly for your target market can result in a lower chance of selling it.
Regardless of who you expect to sell to you should always clear the property out. But if you expect to sell to an investor or developer you shouldn't really go any further than that.
On the other hand, if you've chosen to sell by modern auction because a first time buyer or family may be interested then you should pull out all the stops. Follow guides online about how best to prepare your house. It'll be well worth the time and money invested.
By Matthew Cooper, Founder of Home Selling Expert