These notes are intended to assist potential sellers who are not familiar with the auction process.
There are a number of advantages to selling freehold properties by public auction as opposed to other methods of sale, such as private treaty:
- The timetable for a sale is set out in advance. The marketing period is normally four to five weeks before the auction date. Completion is generally 20 business days thereafter.
- Selling by auction provides certainty, as the buyer is required to sign a legally-binding contract and pay a deposit (normally 10% of the purchase price) at the fall of the auctioneer’s gavel.
- Sales by auction are often preferred by executors, trustees, charities etc, as they are completely transparent and at arm’s length.
- The best type of property to offer for sale by public auction tends to be slightly unusual or rare. It is important to note that there is likely to be competitive bidding from potential purchasers.
- Prior to placing an auction property onto the open market it is important that the seller has instructed his solicitor to have prepared all of the necessary legal documentation which can then be made available to prospective buyers.
- Properties are nearly always sold by auction subject to a reserve price below which it may not sell. It is important that the reserve price is agreed with the auctioneer in writing well in advance of the auction date.
- It is unwise to set the reserve price too high, as this will have a detrimental affect on competitive bidding which is necessary for a successful auction to take place. The reserve price and the guide price should be set at a similar level so that prospective buyers are not misled.
- A seller does not need to attend the auction, as the auctioneer has authority to sign the contract on the seller's behalf and complete the legal formalities.
If you have a property that you consider might be suitable for a sale by public auction, please contact one of our auctioneers who would be more than delighted to visit the property and advise you further.
33 Castle Street, Cirencester, Gloucestershire GL7 1QD
Tel: 01285 648100 or email firstname.lastname@example.org