There are many  benefits to selling a property at auction – all the potential buyers are in one place, they all tend to be cash buyers, and if a property is sold then exchange is immediate.

But what happens if a property doesn’t sell? The simple answer is that properties that do not sell in auctions will be withdrawn from the sale. However, there is more to it than that.

Read on for our easy guide on how to sell property at auction, and what to do if it doesn’t sell.

 

What happens before a property goes up for auction?

Before a property goes up for auction, there are a few steps you’ll need to take. The more prepared you are for the auction process, the better your chances of success.

What is a guide price at auction?

Before a property goes to auction, a guide price will be set. This is essentially a marketing tool which gives potential buyers an indication as to what the property is worth. It is not an asking price and there is no guarantee the property will go for that amount. It may not be a single figure – the seller can give a price range.

It might be tempting to go high with the guide price but sellers are better served by being realistic. It is certainly worth getting this right, because this is one of only a few pieces of information would-be buyers have about the property’s future prospects. 

How to find out the reserve price at auction

A reserve price is the lowest price a seller will accept. This is a confidential figure set between the seller and the auctioneer. Potential buyers will not know what the reserve is but, again, it is worth considering carefully, because the auctioneer will use it to start generating interest ahead of the auction.

For properties with a single figure guide price, the reserve cannot be more than 10% over that figure, and for a property with a guide price range, the reserve must sit within that range and not exceed the top figure. 

What is a legal pack for an auction

Before an auction, potential buyers receive a set of documents about each property, known as a Legal Pack. An up-to-date Legal Pack is considered essential for generating interest and securing a sale.

How to make an offer on a house before the auction

In some circumstances, a thorough and detailed Legal Pack can even help secure a bid before the auction. If a would-be buyer is interested in a property then they may contact the auction house to make an offer ahead of time. Providing this offer is strong enough for the seller to accept, purchase and even exchange can be agreed well ahead of the auction day.

What happens if the reserve price for the property is not met at auction

If a property doesn’t meet its reserve price, it will be withdrawn from the auction. This indicates that there wasn’t significant interest, which may be because the reserve was too high.

However if any potential buyers have indicated an interest in the property, then there is the possibility of securing a post-auction bid. This is when the auctioneer invites interested parties to ask further questions, giving them another opportunity to make an offer.

What happens if my house doesn’t sell at auction?

Whilst a failed auction attempt doesn’t mean your property will never sell, it can be very frustrating and even costly. If your property doesn’t sell, you’ll still need to pay the auction entry fee. Plus, if a solicitor has created a legal pack for you, they may charge a fee despite an unsuccessful auction. 

It can also be tricky to explain to future potential buyers why your property didn’t sell at auction. It’s important that your action attempt doesn’t concern prospective buyers and that you can provide a genuine reason as to why it didn’t sell.

What happens after a property auction

If the property did not sell, your auctioneer will ask any interested buyers if they would like to make an offer, hopefully leading to a post-auction sale. If there were multiple interested buyers, there will still be an element of competition which can often result in a reasonable price. But there’s no requirement to accept any post-auction bid if you’re unhappy with the price offered.

Trying again to sell your property at auction

The second option is to try and sell at auction again. Perhaps your property wasn’t priced correctly? Maybe your legal pack wasn’t comprehensive? Or, maybe your property was just incorrectly prepared? There are a number of reasons as to why your first attempt at auction may have been unsuccessful.

If you’d like to try this option again, you’ll need an experienced estate agent to guide you through the process. Some buyers may notice that your property has been through the auction process before, so it’s important that you have someone with knowledge in the industry to navigate this situation.

Holding onto your property

Some sellers may choose to hold onto their property and wait for a better opportunity to arise. House prices constantly fluctuate, meaning that your property could sell for a higher price in the future. 

In the meantime, you could consider re-mortgaging the property or even renting it out, if it’s currently vacant. This option would enable you to earn some income whilst you await a better time to try selling your property again.

 

Selling your house with an estate agent

If your property failed to sell at auction, you can instead sell it with an estate agent. You’ll need to pass any information regarding the outcome of your auction attempt to the estate agent.

Here at Michael Anthony, our experienced and knowledgeable team are on hand to advise you through the entire process. Established in 1989, we have over 30 years of experience in the property industry. As the longest-established independent estate agency in the town of Aylesbury, we provide unrivalled property services to all of our clients. 

Find out more about our auction services at our estate agents in Aylesbury, and get in touch with any queries.

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