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Is selling a property at auction right for you?
- AuthorDanny Ball
If you're looking to sell property in the UK, you may have considered selling at a traditional auction. But is selling property at auction right for you? In this article, we'll explore the legal implications, rules and regulations, and important considerations when selling property at auction in the UK.
Property auction process
First, it's important to understand the traditional auction process. Auctions are typically held in a public venue or online and allow potential buyers to bid on the property. The highest bidder at the end of the auction is legally bound to purchase the property, provided the reserve price (the minimum price at which the property can be sold) is met.
What to know about selling property at auction
One of the biggest advantages of selling property at auction in this way is that it can be a quick and efficient process. Unlike traditional sales methods, which can take several months or even years, auctions are typically completed within a matter of weeks. Additionally, auctions can generate a lot of interest from potential buyers, leading to competitive bidding and potentially higher sale prices.
However, there are also potential disadvantages to selling property at auctions. For example, if the reserve price is not met, the property may not sell at all. Additionally, sellers may need to pay auction fees, which can vary depending on the auction house and the type of property being sold.
Other Methods of Auction
We are now seeing a variation of the traditional method of auction, often known as the modern method of auction. The principle for buyers is the same. You should only commit yourself to paying the reservation fee or deposit if you are certain that you can complete the matter and you have had advice on the auction pack as well as a survey. Once a reservation is paid under this method of auction it is often non-refundable. Check the timescale that you will be required to complete by as this can be a short period. If you need mortgage finance to purchase the property make sure this is all fully agreed before your commitment to purchase is made.
The legal side of selling property at a traditional auction
Before deciding whether to sell your property at auction, it's important to consult with legal and financial professionals to fully understand the legal implications and costs involved. Here are some important legal considerations to keep in mind:
When you sell via an auction, you are entering into a legally binding contract with the highest bidder. It's important to ensure that you have a clear understanding of your obligations and the buyer's obligations under the contract.
You are required by law to disclose any material defects or issues with the property to potential buyers. Failing to do so could result in legal action against you.
Payment and completion
Once the auction is complete, the buyer is legally bound to pay the purchase price and complete the transaction within a set timeframe. It's important to ensure that you have a clear understanding of these deadlines and any consequences for failure to comply.
Legal and financial advice
It can be a complex process, and it's important to seek legal and financial advice to ensure that you are fully aware of your rights and obligations.
Rules and regulations
In addition to these legal considerations, there are several rules and regulations that govern property auctions in the UK. For example, auction houses are required to provide potential buyers with a buyer's guide, which outlines the terms and conditions of the auction and any fees that may be charged.
It's also important to be aware of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which give buyers certain rights to cancel a purchase within a set timeframe.
Choosing an auction house
Finally, it's important to choose the right auction house when selling your property. Look for an established auction house with a good reputation and experience selling properties similar to yours. Be sure to read reviews and ask for references before making a decision.
Selling property this way can be quick and efficient way, but it's important to fully understand the legal implications, rules and regulations, and costs involved. Seek legal and financial advice, and choose the right auction house to ensure a successful sale.