Auction Houses

Auction houses are being used to offload difficult houses.

Proof of this can be found by searching on Zoopla or Rightmove for homes (detached, semi, terraced, flats) that are between £90,000 and £120,000.

The majority will be listed as "**For sale by Modern Method of Auction**"

This does not guarantee you a price.

This appeals to the developer market and the bargain hunters only.

Example

Things that concerned us

Fake bids

Auction houses have never fully shaken the scandals of fake bidders artificially raising the price on potential buyers, while good for sellers, it has meant the naive buyers who could get carried away bidding are put off, this limits your potential buyers in an auction to experienced veterans.

Fixed costs

Some, not all auction houses, apply fixed costs irrespective of the property value, this could be as much as £6,000, again, not a concern of the seller as the buyer will pay but this will again deter naive buyers who may get carried away bidding.

The same pool of buyers

Auction houses don't wait for your buyer to apply for a mortgage, they must complete the transaction in 30 days from successfully winning their bid on your home, this means cash buyers only (or bridging loans, but I wont get into this here). This means the same investors Housing Hope can reach, is what you will be discounting your home to reach with instant cash

Mixed use

An auction can oversee deals and can be used for two business deals to complete, we have heard that SME businesses have used auction houses to complete some deals that might have been more expensive through traditional routes.

There is nothing inherently wrong with this practice, it does mean that auction houses are not for the faint of heart or the indecisive new bidder.

In Summary

If your estate agent wants you to auction your home or you want to auction it, go in open eyed and look at all the fine print for the buyer and the seller and consider the worst case vs your best case scenario, is it worth the risk?