“Why do properties go to Auction?”
When people think of a Property auction, the first thing that generally comes to mind, is the that house down the road which is all bordered up and falling apart. They think of an auction room full of builders and property developers, with stashes of cash, ready to buy those falling down Properties for as little money as possible. And, the sellers of those properties are just selling for a low price to get rid of them.
That may have been the case many years ago, in a similar era to when you could pop down to the local corner shop to borrow a VHS tape and watch the latest movie.
Times have changed since then. Now with the touch of a button, you can watch the likes of Netflix with very little effort, just sit back and relax.
Well, property auctions have come a long way too. You now have two ways to sell a property by auction.
1. The ‘Live’ room, or now due to covid-19 the ‘Live’ streamed auction.
2. The online auction, which is similar to eBay. You can buy a property at the click of a button.
" Selling by auction means I’ll get less for my property? “
Not necessarily, let us compare to the standard way to sell your property with a Wirral Estate Agent.
Your local estate look around the property, and then give you a market price or valuation. This market price is just a guide price, of what they think it may sell for. They may even put it on the market for the price you want, even if they think it is a little too high, just to test the market and see if you get any interest. This is where you expect to sit back and relax and prepare for the stampede of buyers with pockets full off cash.
Unfortunately, there is a big difference between a marketing price and a sold price, or what we like to call it "Cash in the bank price”. A ‘Guide’ price is not realistic. Always remember, the price does not mean anything until that money is in your bank.
The average time to sell a Property on the Wirral is 254 days. That’s around 8 months from the day you put your property on the market until the day your money is in your bank. During which time, you still have bills to pay, mortgage payments and other costs related to the property.
Live stream Property Auction
Each month, WRB Auctions along with our partners, SDL Auctions operate a live steam event. You can list your property on the Live stream event in a max time of 31 days marketing and within 28 days of selling your property, your cash is in the bank.
Online Property Auction
Online auctions run for 28 days, once sold the buyer has 56 days to complete the sale, which is when you your cash hits the bank.
You can see how quick the process is. You could potentially save £££££££ in bills associated with your property you are trying to sell. WRB Auctions always look at the recently ‘sold’ prices, basing our valuations on sold figures to give you an honest price of what you will achieve.
WRB Auctions aim to get you the highest price in the shortest amount of time. We set a reserve price (the lowest price you will accept). We then have a guide price, 10% below your reserve price.
With a guide price you are happy with, we will make sure your property stands out in the crowd, aiming to generate as much interest as possible. The more interest you receive, the more bidders you will have competing for the property. This can raise the price it sells for.
Property Auction Sale Example
We have recently sold a run-down property that had a guide price of £105,000. Other properties which were fully refurbished in that road, sold for an average of £150,000. The seller had spoken to local estate agents, who had given a marketing value of £130,000 - £140,000. As we explained earlier, this is just a marketing price.
If the seller put the property on the market with the local Estate Agent, it would have taken around 8 months to sell, possibly reducing the price during that time.
The seller decided go to Live auction instead, with a guide price of £105,000. They had lots of interest and registered buyers, which made bidding highly competitive. The final sale price was £124,000. £19,000 over the guide price. The whole process only taking 31 days marketing and 28 days until the seller received their cash.
You’re thinking, that seller may have lost £16,000?
Bear in mind, the only fees the seller paid at auction was for their auction pack and legal fees. On average £1,200 for both.
£124,000 - £1,200 = £122,800 Cash in the bank that you can spend.
With an estate agent price of £140,000, would they have received the full asking price? Doubtfully, the average offer is 5% below the asking price, so they would have likely accepted £133,000.
The seller has potentially £9,000 more than the auction sale.
£133,000 less 2% Agents fees £3,192 less £800 Legal fees = £129,008.
If the sale completes, at £133,000, they may be better off by £5,008. But, bear in mind, the live room auction sale is completed from start to finish in 2 months. With an estate agent, there are no deadlines to complete the sale. That £5,008 will then be eaten up by the extra 6 months’ worth of bills due in that time.
Property Auctions not for everyone!
Property auctions are not for everyone, but the way things have changed over the years. There should always be an alternative route to consider. The above property example may have been under offer for 3 months with local estate agent, surveys get done and the surveyor picks up on something they do not like. Buyer wants to reduce the price, now there is only a couple of ££££££ difference between estate agents price and the auction price.
So, is it a risk selling your Property at auction? Or is it a risk not to?
“How much does it cost to sell a Wirral Property at Auction?”
WRB Auctions sell property on a No Sale - No Fee, basis, the only fees a seller will pay is for the auction pack and legal fees. We always recommend budgeting £1,200 to £1,500 for residential sales, £1,500 to £2,000 for commercial sales. We do not charge a % fee to sell your property with WRB Auctions.
“What happens if a property does not sell at auction?”
WRB Auctions monitor both our live streamed and online auctions, we know how many auction packs have been downloaded by potential buyers, how many bids are coming in etc. This allows us to monitor the situation and make decisions before the auction ends, to achieve a sale for you.
Who buys Property from an Auction?
With the new modern online auction, the simple answer is everyone can. Landlords, first time buyers, second time buyers, property developers, businesses. You!
Buying a house at auction with a mortgage.
WRB Auctions have sold many properties to buyers using a mortgage. The online auction with the 56 days to complete gives the buyers time to make mortgage arrangements.
Can a first-time buyer, buy a Property at auction?
The simple answer is yes, we recently sold a bungalow to a first-time buyer. If you have the money to cover the auction buyer fees, you can buy via an online auction with a first-time buyer mortgage.
Live Streamed Auction
Cash – Bridging Loan - 28 Day completion
Cash – Bridging loan – First time buyer – Second time buyer – 56 day completion.
Please bear in mind, if you are buying at an auction, all reservation fees and auction deposits are non-refundable. So, you must be 100% committed to purchasing a property.
If you would like to discuss if selling or buying a property by auction is right for you, please give us a call on 0151 652 5289 or send us an email email@example.com
Instant Auction Valuation