Pros and Cons of Selling at Auction
Selling at auction has no estate agency fees and the seller keeps the full price. A Lincoln home sold in 7 days for £15K over asking. Auctions allow maximum value, security, and fixed time frames.
Benefits of Selling a House at Auction
Selling a house at auction can be a great way to maximize your return, but there are both pros and cons to consider. One of the main benefits of selling a house at auction is that it attracts a wide range of potential buyers. Unlike when selling through traditional methods, an auction encourages competition among bidders which can lead to higher bids and ultimately higher returns on the sale.
Why Auction a House?
Why would you auction a house instead of selling it? Auctioning a house instead of selling it can be a great way to maximize your return. It allows you to set the terms of the sale, giving you more control over the conditions and the price for which it will be sold. Furthermore, auctions can generate excitement among buyers, which could lead to higher bids and a greater return for you.
Risks of Buying a House at Auction
What are the cons of buying a house at auction? The three main risks when buying property at auction are: Not having enough information about the property, Not being prepared in advance, and Getting carried away during the auction itself and overpaying.
Informative Points
- An auction gives you a quick sale without fear of a buyer pulling out. Auctions attract investors willing to refurbish homes for profit.
- The optimal auction length is 7-10 days. Auction houses take a percentage cut of the winning bid as a fee. This cut is 5% for faction auctions, and 15% for neutral auctions.
- If unpaid, items may be returned, re-auctioned for less, or sold privately at a loss.
- In foreclosure, if unpaid after 90-day notice, the home is auctioned in 21 days. After foreclosure, occupants can be evicted.
- With no payment at auction, the home is re-sold, and the buyer sued for differences.
- When selling your home, it’s extremely important to choose the right method of sale. Auctions create a competitive bidding environment and have the ability to establish an emotional connection between the property and the purchaser in a short period of time. This may increase a home’s value and help achieve a premium result.
Considerations for Buying at Auction
- Buying a house at auction can be a way to get a good deal. Yet buying isn’t without risks. Auctions are public sales of property held by governments or banks. They can be good deals because the sellers want to cut losses.
- To make your auction experience positive, understand the process. Auctions have fixed timelines which limit due diligence. While competition drives down prices, it can also lead to overpaying in bidding wars. Set a budget and remain disciplined.