Selling Your House Tips: Quick House Sale vs Property Auctions

Quick House Sale vs Property Auctions

If you need to sell your house fast, a “traditional” sale with an estate agent is unlikely to deliver the results you need. It can take months to sell on the open market — the average time is around four months, but it may take a lot longer if you have a hard-to-sell property or the market is slow.

Are there any quicker routes to selling a house? You bet. Both property auctions and quick house sale companies provide a faster alternative. But which one is right for you? If you’re looking for “selling your house tips”, read on to find out the pros and cons of each way of selling.

What Is a Property Auction?

There are two types of property auction — modern and traditional. 

Traditional auctions have been around for years but have generally been the preserve of property developers, investors and cash buyers. Interested parties are invited to attend an auction house at a specific date and time where they can bid on any listed property. Contracts are exchanged on the auction day, and the winning bidder must complete the sale within 28 days.

Modern auctions have become increasingly popular in recent years. Competition is fierce, and people from all walks of life are attracted by the potential for a quick sale and a higher sale price. Buyers are enticed by the prospect of snapping up a bargain “fixer-upper”. Modern auctions offer more flexibility and convenience than traditional auctions. They take place online, and the buyer has 56 days after making a winning bid to exchange and complete the sale. 

How Does a Property Auction Work?

Both types of auction work in a similar way for sellers.

You will need to research and select an auction house that will conduct a valuation of your property. If you’re happy with the valuation, you can confirm your agreement to proceed and set a guide and reserve price. The guide price is shared with potential buyers to give them an idea about how much to bid. The research price is the minimum amount you would be willing to sell the property for. There must be no more than a 10% difference between the guide and reserve price.

Next, you will instruct a solicitor, and the auction house will market your property. You may receive some pre-auction offers, which you are free to review and accept. Or, you can wait for the auction day and exchange contracts with the winning bidder on the day. Completion must take place within the following 28 days.

The main differences between this type of traditional auction and a modern auction are that bids are made online during a specified period, often around a month. The winning bidder only pays a deposit on the day of the auction (the exchange of contracts can take place any time within the next 28 days).

Top Tips for Choosing a Quick Sale Company You Can Trust

What Is a Property Auction?

There are two types of property auction — modern and traditional. 

Traditional auctions have been around for years but have generally been the preserve of property developers, investors and cash buyers. Interested parties are invited to attend an auction house at a specific date and time where they can bid on any listed property. Contracts are exchanged on the auction day, and the winning bidder must complete the sale within 28 days.

Modern auctions have become increasingly popular in recent years. Competition is fierce, and people from all walks of life are attracted by the potential for a quick sale and a higher sale price. Buyers are enticed by the prospect of snapping up a bargain “fixer-upper”. Modern auctions offer more flexibility and convenience than traditional auctions. They take place online, and the buyer has 56 days after making a winning bid to exchange and complete the sale. 

How Does a Property Auction Work?

Both types of auction work in a similar way for sellers.

You will need to research and select an auction house that will conduct a valuation of your property. If you’re happy with the valuation, you can confirm your agreement to proceed and set a guide and reserve price. The guide price is shared with potential buyers to give them an idea about how much to bid. The research price is the minimum amount you would be willing to sell the property for. There must be no more than a 10% difference between the guide and reserve price.

Next, you will instruct a solicitor, and the auction house will market your property. You may receive some pre-auction offers, which you are free to review and accept. Or, you can wait for the auction day and exchange contracts with the winning bidder on the day. Completion must take place within the following 28 days.

The main differences between this type of traditional auction and a modern auction are that bids are made online during a specified period, often around a month. The winning bidder only pays a deposit on the day of the auction (the exchange of contracts can take place any time within the next 28 days). 

The Pros and Cons of Selling Property at Auction

There are many reasons why you might be interested in selling a property at auction. Perhaps you have a problem property that is proving hard to sell? Or maybe you have inherited a house, and you want to sell it without the stress and emotional upheaval of constant viewings and a lengthy wait for a sale?

But selling at auction is not a straightforward process for people new to it, and costly mistakes are common. Make sure that you understand how it works and weigh up the pros and cons before committing.

Pros

  • Speed of sale. Selling at auction is typically faster than an on-market sale. A traditional auction should complete within 28 days and a modern auction within 56 days, compared to around four months on average, to sell a house via an estate agent (this can be a lot more if you have a house in poor condition or of non-standard construction).
  • Avoid property chain problems. Buyers at auction are often cash buyers with no chain. Securing a mortgage within 28 or 56 days can be difficult, plus auctions attract a lot of bargain hunters and developers who want to buy a property for cash and do it up. One of the main benefits of selling to a cash buyer is avoiding the delays and disruptions of property chain problems. 
  • Sell a problem property. It can be challenging to sell certain types of property via the traditional route. Many buyers will be put off by the need for extensive repairs, dry rot, noisy neighbours, title problems and anything else that adds to the stress and expense of purchasing your property. Auctions have long been the go-to house sale option for people with hard-to-sell properties because they attract developers and bargain hunters who are eager to find a property they can do up and add value to.
  • The possibility of a higher sale price. Competition could drive up the final sale price of your property. If multiple bidders are interested, this could result in a better outcome than you would achieve via a traditional sale. However, this is far from guaranteed, and it’s just as likely that bargain hunters could place low bids, resulting in a disappointing final sale price.
  • Fewer time wasters. You can bypass the “hobby” viewers and buyers who are “just browsing” to get an idea of what they want and can afford by selling at auction. Auctions typically attract serious buyers, including — although not exclusively — developers and investors.
  • No risk of “gazundering”. If a buyer reduces their offer just before the exchange of contracts, making it hard for the seller to back out, this is known as “gazundering”. There is no risk of this happening at an auction. Once a bid is made and accepted, it cannot easily be amended.

Cons

  • High auction house fees. The costs of selling at auction can be high. Sellers typically have to pay an upfront entry fee to the auction house of several hundred pounds. There will also be administration fees to pay (around 2.5% of the sale price) plus the cost of a legal pack and solicitors fees. These costs can quickly add up and eat into any profit made from the sale.
  • Expensive mistakes. For sellers who are new to auctions, costly mistakes are easy to make. For example, it may seem like a good move to set a low guide price to attract more buyers. However, the reserve price must be within 10% of the guide price, to result in a bargain sale for the buyer! (Not so good for the seller).
  • There is no guarantee that your property will sell. Some of the fees payable to the auction house may not be refundable, which could mean that you go through the entire process and fail to sell your property and be landed with a hefty bill.
  • You may need to move quickly! If your property does sell at auction, completion should take place within one or two months, depending on the type of auction. So if you’re currently living in the property, you’ll need to move out fast.
  • Unclear payment structures. Some auction houses may quote low fees only to add costs further along the process. Be sure to check the small print before signing anything and find out which expenses are refundable if your property fails to sell. 

What is a Quick House Sell Company?

Quick house sale, house buying or “we buy any house” companies buy your property directly from you for cash in as little as seven days. There’s no need for estate agents or property viewings. This is the quickest way to sell a property. 

Most quick house sale companies make their income by buying properties below market value and selling them higher. Many companies claim to be genuine cash house buyers but many either do not have the funds to buy your property outright or they will use dodgy sales tactics to force an unfairly low sale price. 

 

Be sure to do your research to find the best quick house sale companies.

 

How Does a Quick House Sale Work?

Each company will have their own process, but most companies operate similarly:

  • Fill out a short form — tell the company a little about your property. This is generally a quick and easy job you can do online.
  • Speak to the company — the company will call you to gather more detailed information about your property and find out whether a quick house sale is a good choice for you.
  • Receive a cash offer — this will be slightly below market value. House Buyer Bureau typically offers around 80 to 85% of the market value. But there are no estate agents fees to pay and no legal fees if you use one of our recommended solicitors.
  • Accept the offer — if you’re happy to proceed with the sale, you can formally accept the cash offer. Remember! Do your research before signing anything. Not all quick house sale companies are created equal. Some will try to tie you into a long contract to prevent you from changing your mind or selling to someone else. Others may make an outstanding cash offer, only to drop it at the last minute — if the offer seems too good to be true, it probably is!
  • Have a survey — the company will arrange for at least one survey of your property. House Buyer Bureau backs all its cash offers with a price promise. Unless something unexpected shows up in the survey, we will not reduce our original offer. On the rare occasion that we have to do so, we will give you £1,000 to keep, whether you go through with the sale or not.
  • Exchange contracts and complete the sale — some companies offer different routes to sale. House Buyer Bureau provides a quick cash sale route that you can complete in as little as 7-days and an investor route that takes around eight weeks but allows you to achieve a higher sale price. 

Unlike a traditional sale, there is no need for property viewings, and you can avoid estate agents and legal fees. Although your cash offer will be below market value, these cost savings are significant, so the difference between how much cash you walk away with when selling via a quick house sale company and how much you’d receive selling via an estate agent is probably less than you might think.

The Pros and Cons of Selling to a Quick House Sale Company

As with property auctions, there are some things to consider before selling your house to a quick house sale company. People choose to sell this way for various reasons, from divorce and financial difficulties to ill health or the need to relocate quickly for work. Is a quick house sale right for you?

Pros

  • A time scale that suits you House Buyer Bureau can buy your home in as little as 7-days. If you need longer, we will work to a time scale that suits you. We won’t rush you, but we can get things moving fast if you need us to! This flexibility offers the ultimate convenient and hassle-free house sale.
  • A chain-free cash buyer — choose a genuine cash house buyer that has the funds to buy your house outright without securing financing or enlisting a third-party buyer. This way, you can avoid the expense and stress of property chain problems or a buyer who struggles to secure a mortgage.
  • A guaranteed sale — this is the only way to guarantee a house sale. Once you accept a firm offer, there is no risk of the buyer changing their mind or finding another property they prefer, as often happens to people who sell on-market. This gives you peace of mind and enables you to plan your move with certainty.
  • Sell a hard-to-sell property. “We buy any house” companies purchase properties of all types and in any condition. If you have a property you’re struggling to sell, a quick house sale could be the best solution. 

Cons

  • Below market cash offer — quick sale companies make their income from buying properties at a discounted price and selling them at a profit. However, the lower offer is somewhat offset by the lack of estate agents and legal fees.
  • Unscrupulous companies — some genuine cash house buying companies will offer a fair price and work with you to achieve your desired outcome. Unfortunately, others will engage in dodgy sales tactics and fail to deliver on their promise of a “quick” house sale. Do your due diligence before committing to a sale.

There is no “one-size-fits-all” route to selling a house. The best option for you will depend on your personal preferences and circumstances. Do you need to get the highest price possible for your property, or is speed of sale the priority? Are you eager to avoid the inconvenience and stress of constant viewings? Do you need a guaranteed sale that you can rely on? Weigh up the pros and cons of each option — an on-market sale with an estate agent, selling at auction or a quick house sale company — to find the path that’s right for you.

If you want to sell your house fast and need the peace of mind of a guaranteed sale, get in touch with us at House Buyer Bureau. One of our expert house buyers will be happy to talk through how a sale to us works and give you a free, no-obligation cash offer if you would like one.  

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