What are the advantages of selling property by auction?

Why consider selling By Auction?

I’m Nigel Adams from BigBlackHen.com and TheProbatePropertyShop.com, the specialist probate estate agents.

I am often asked what are the reasons why I might sell property by auction rather than the more conventional private treaty approach where a guide price is set and people offer? What are the benefits of selling properties by auction? What sort of properties are best suited to sale by auction?

So, first of all, what is an auction?

Even if you have never seen one in the flesh, most people will be familiar with the idea of a room packed full of buyers with the auctioneer inviting increasing bids from the floor. It’s actually one of the oldest sales methods and, amazingly enough, dates way back to the Ancient Greeks.

The crucial point is that under English law, once the auctioneer’s gavel, or hammer, goes down a legal contract has been created between the buyer and the seller at the price bid. At that at that point, contracts have exchanged, and the property is effectively sold.

So the great thing about auctions is certainty. Certainty for the seller as the buyer will pay a deposit, usually 10%, and the rest on completion, usually 28 days later.

And certainty for the buyer, as if you are successful at auction, the property is yours.

With three out of ten conventional sales falling through nationally, this certainty is the ace card for selling by auction.

However, there are other benefits, and a crucial one is that the sense of competition that a well-run auction generates can help sellers achieve a very strong price for their properties, which could mean more money going to the beneficiaries. After all, it’s human nature to want something that someone else wants. In the heat of the moment it’s easy for buyers to get tempted to raise their hand for one more bid.

And for professional executors, there is another benefit, as they have a legal obligation, what’s called a fiduciary duty to achieve the true open market value. The open and competitive nature of the auction process means that they can show that this is the case.

To help to decide if selling by auction is right for your probate property, call one of our helpful advisors on 0203 758 7650.