Auctions and the Value of Auctions
Published by The Landsite on 3rd December 2020 -
Every year thousands of properties both commercial and residential are sold at auction, and they are increasing in popularity not only with investors and developers looking for renovation projects to do a quick turnaround but also with mainstream buyers and sellers.
According to Zad Siadatan, CEO of Connect UK Auctions, auctions have lost the stigma that they only sell repossessions, damaged properties or those in need of total refurbishment. And prospective buyers are realising the benefits of speed and security of buying at auction.
Not only are there more people buying at auction, but this year has also seen an acceleration in the delivery of online auctions driven by the coronavirus pandemic. While, according to Clive Emson Auctioneers, live auctions offer a great opportunity to network with like-minded people and make new connections, online auctions are more accessible—you don't have to leave your home or office to participate.
This year nearly 40% more property by value has been sold at auction compared to 20191. Auctions were forced to migrate online following the March lockdown, and this new easy access opened them up to a bigger audience including less experienced potential buyers.
Auctions are an opportunity to find a great deal, especially if you're looking for a renovation project or a property with planning permission at a great price.
Buying or selling through an auction isn't guaranteed to be any easier than using a real estate agent, but it is certainly much faster. The entire buying process should be completed within a set number of days after the auction (usually 28), which is a vast improvement on the average 18 weeks to buy via the traditional estate agent route.
Auctions reduce the risk of gazumping and deals falling through. The transparent buying process means you can see the other bids for yourself—no relying on an estate agent to advise on the interest of other buyers. Plus, contracts are (usually) signed as soon as the auction hammer falls, which means there's zero risk of a sale falling through at the eleventh hour.
If you're selling at auction, you'll get paid quickly. The buyer will usually pay a 10% deposit on the day and the balance within 28 days, and you can be sure that your property will achieve its best possible price on the day due to the competitive bidding process. As a seller, one of the main advantages is that the sale is not dependent on one single buyer.
For property owners with a unique home, a property with a legal complication or a property in need of significant renovation then an auction is your where you are most likely to find your buyer. According to WA Barnes, auction remains the best route to market for the 'right' kind of property, plus a significant advantage to online sales is that individual Lots can be brought to market at short notice.
Online auctions also reduce the cost to sellers as digital sales details, guide prices and reserves mean easy updates and no printed catalogue costs. And, if your property fails to sell, you can easily and quickly enter it into another auction.
If you don't need a 'managed' or co-ordinated purchase or sale, then the ease, speed, and flexibility offered at auction might be your preferred choice.
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