When selling your home, you have choices in how you achieve a sale; for many the most natural way is to instruct an estate agent to sell your home by traditional private treaty. But if you have been keeping an eagle eye on the property market, you may have come across an alternative: the modern method of auction. This is a simpler process than a normal auction; conducted online, it is more accessible to a wider range of buyers. With that is mind, is the modern method of auction the right way to sell YOUR home?
How does it work?
Selling your home through an estate agent is not always straightforward, and, with the backlog in the conveyancing process, according to Rightmove it takes 50 days longer than it did during the same period in 2019. This means it is currently taking around 150 days, on average, from the time a home is marked as ‘sale agreed’ until that very important completion day. The modern method of auction can be a quick and more convenient way to sell your home, but is it as rosy as it sounds?
When you sell your home through the modern method of auction, your property is marketed in similar ways to when you list the traditional way with an estate agent. You will find listings on the property portals such as Rightmove and also by estate agents like ourselves that offer this as part of our package of services. The auction runs over a period of around 30 days and buyers bid online from the comfort of their home, like they would for auction sites like eBay, and at the end of the auction the highest bidder wins.
If you were to purchase a property at a traditional auction you would have only 28 days to complete. But when you buy through the modern method you can opt to have 56 days to complete, allowing buyers time to organise a mortgage if necessary. This opens the doors to a wide range of buyers and thus increases the number of bidders.
What are the benefits?
One of the main benefits has to be the speed: when you compare the difference between the conveyancing process taking 150 days but a maximum of 56 with the modern method, you can see how choosing this type of auction can be extremely attractive if you are looking for a quick sale.
Another benefit is the greater level of certainty. When selling through traditional private treaty, once an offer has been accepted the sales process can sometimes be a rocky road and because no contracts have been signed either party can walk away. With the modern method, an auction is a binding agreement with a non-refundable deposit, making it a stronger to commitment.
Things to consider
One of the main things to consider is that you compromise on the sale price – you should expect to sell for approximately 85% to 90% of your home’s full value. On the plus side, the auction fees are covered by the buyer, so there will be no deductions from the sale price except for your legal fees.
Although there is more certainty than selling through traditional private treaty, it is not as certain as a traditional auction where, upon fall of the gavel, the sale exchanges making it legally binding. There is a legal agreement within the modern method between the buyer and auctioneer, it isn’t final, making it easier for buyers to back out.
Is it right for you?
As with all decisions about when and how to sell your property, it depends on your personal circumstances. As we start to enter the winter months, and the cost of living crisis starts to really take hold, you could be questioning which is better for you: to sell quickly or achieve the best price. If you are needing to free up cash quickly, the modern method of auction could be an option. Whereas ensuring you get the highest possible price of your property, and having the support of an estate agent through the entire sale, may be the solution.
Before you make any decisions, come and chat to our team at Deakin-White we can let you know how the property market is performing and answer all the questions you may have to help assess what is the right move and can help you with both options.
