Unsold Auction Property: What Are Your Options?
Estimated reading time 6 minutes
When deciding to sell a property at auction you will have weighed up the pros and cons. The pros being auctions typically attract investors and buyers who are willing to do work on a property if the price is right. Properties that are run-down, unmortgageable or appeal to buy-to-let investors are often found in auction catalogues. Property sellers also benefit from a predefined end date, ie when the auction takes place and with a contract exchange as soon as the hammer goes down making a deposit payable in 24 hours which reduces the chances of a sale falling through. The negatives are that your property may not sell, you will have to pay entry fees regardless and you can be left with an unsold auction property.
If you are an owner of one of the 21% of unsold auction properties do not despair there are a number of options available to you that can still provide you with a quick and easy way to sell a house fast.
Seek a post auction sale
Once a property has been offered for sale at an auction and the action concludes without a successful bid that meets the reserve price the auction house initiates a process known as a “post-auction sale.” This takes place whether you offer your property for sale through a traditional auction house or an online auctioneer. It enables “unsuccessful” sellers to make deals with potential buyers even after bidding has ended.
The first thing the auction house does it reach out to potential buyers who had shown interest in the property before and during the marketing period. This may include individuals who attended viewings, expressed interest, or registered as bidders during the auction. Interested buyers are encouraged to submit their best offers for the property to the auction house. A representative from the auction house engages in negotiations with the potential buyers with the aim of securing a sale price that is acceptable to both parties. If the property owner accepts an offer, a sale can be made under auction conditions, a sales agreement is expedited outlining the terms and conditions of the sale, including the sale price, deposit, and any contingencies.
It’s important to note that not all post-auction sales result in a successful transaction. Sellers are typically on the back foot in negotiation as the buyer likely knows the property failed to sell at auction and therefore, they will present a low offer. The negotiations can take several days or even weeks before an agreement is reached.
Re-auction unsold property
If your property remains unsold at the close of the auction and you did not secure a post auction sale you could relist it for sale at the next auction. A good auction house will advise you how to improve your chances of selling the property. They will no double ask you to re-evaluate the reserve price, that is the minimum price that you are willing to accept for the property as it may have been a factor in its failure to sell. Make sure you provide a timely legal pack for potential buyers and provide enough access for potential buyers to view the property. By doing this you will increase the chance of your property selling.
Whether you choose to use the same auction house or explore alternatives will depend on the terms and conditions specified in your contract with them. Some auctioneers include exclusivity clauses in their contracts, preventing you from marketing the property with another auctioneer for a defined period. If the property is sold to a private buyer during this restricted timeframe, the original auction house may still be entitled to their fees.
Another reason why it is sometimes better to stay with the same auctioneer is that they may waive fees when reoffering your unsold auction property at a subsequent auction.
It’s important to note that there is no guarantee that even with a revised price, a timely legal pack and property access that you will attract a buyer for your property and while you are waiting you will continue to be responsible for the mortgage, insurance and expenses related to the property. Therefore if you need to sell your flat fast this may not be your best option as there can be a delay in relisting as auction company’s work on a cycle and the next catalogue release date may not be for weeks.
Sell unsold auction property via an estate agent
It may be that the price you need to achieve for the sale of your property is too high to attract auction buyers and therefore if you have time to wait to find the right buyer you consider instructing an estate agent. They typically will value higher than an auction house and therefore given your price requirements your property will be better suited to an estate agent. Do make sure your new estate agent has all the information on the auction as they will need to manage the fact that your property went unsold at auction to potential interested buyers.
Please be aware that there will be fees to pay, with a traditional estate agent charging somewhere between 1% – 3.5% of your house’s sale price. An online estate agent typically charges an upfront flat fee between £1,000 and £2,000 but may charge more for photographs and conducting viewings and your property still may go unsold.
Sell unsold auction property to cash house buyer
A cash house buyer has the money in the bank to buy your property outright, there is no need for them to secure funding. This guarantees a sale of your unsold auction property and speeds up the sales process and a cash house buyer can buy your home in as little as 24 hours.
Gaffsy a genuine cash house buyer, member of NAPB and Property Ombudsman will buy any home or property no matter the condition or the circumstances.
Our team of property buyers have enabled clients up and down the country to sell their unsold auction properties fast and hassle free. When you sell your property to Gaffsy there are no hidden fees so the final price agreed is the sum that hits your bank account.