When the topic of selling a property at auction comes up, many people conjure up images of derelict homes and desperate sellers. These preconceptions are often far from the truth. In reality, auctions can be an excellent method for selling a wide range of properties, not just those in disrepair or financial distress.

With this in mind, we’ve tackled several myths to help you better understand the auctioning process, and give you a little more faith in it.

1. Only Homes in Bad Condition Are Auctioned Off.

This statement is completely false. Just because a property is going to auction, it doesn’t mean that it’s in a poor state of repair. Sellers might choose to auction their property for a variety of reasons, including the need for a quick sale or a desire for a streamlined process.

“Problem properties” were traditionally only sold at auction, suffering from various issues, like subsidence, short leases, legal complications or otherwise. However, thanks to the introduction of online auctions, perfectly normal properties and commercial buildings can also be sold through the process.

Auctions can feature:

• “Problem properties”
• Normal properties
• Pubs, churches and garages
• Freeholds
• Commercial premises

2. It Costs More to Sell at Auction.

Some people believe that selling through auction is more expensive than using an estate agent. This isn’t necessarily the case. The fees for both methods can be quite similar, depending on local pricing structures. In the majority of cases, you won’t pay out more for choosing to sell your home faster at auction.

However, if you factor in the speed at which you can sell at auction, you can end up saving money. According to Zoopla, it takes about 25 weeks to sell a home, from listing to handover. When going through the auction route, the process can last anything from 4—10 weeks.

The traditional estate agent route can be prolonged by buyers falling through or pulling out of the process, and the arrangement of mortgages, surveys and contracts adds on 12—16 weeks. All the while, the seller has mounting costs with their existing home to keep paying. With the speedier auction process, you can let go of existing running costs much more quickly.

3. Houses Sell For Less At Auction.

It’s widely accepted that property auctions are sold for 80% of their value, but this depends on the type of property and how it’s marketed. Thanks to property renovation programmes, it’s widely believed that auctioned homes are sold for less because they need a bit of work, as they’re compared to a lot with a similar market value and move-in condition. However, current trends could work in your favour.

At the end of 2023, home buyers through estate agents were asking for bigger discounts off asking prices than they were in the last five years. Homes sold for an average of 5.5% less than their value — and in some cases, even more. This means that more people are paying £18,000—£25,000 less for a property by going through an estate agent, and not getting the “true” value of their home.

When your home goes up for auction, bids are started within 10% of the guide price. This encourages competitive bids, which can raise the value even more. Estate agents, on the other hand, will only ever lower the asking price of a home if it’s not selling. This means you could get more for your home if you sold through auction than if you were to go through an estate agent.

There are also ways to increase the value of your home before you sell.

4. Property Auctions Are Rushed.

This is also false. It’s a common misconception that auctions happen fast and the process is all over quickly. While it is faster than traditional selling methods, there are processes in place to protect you as a seller.

Before a property goes up for auction, extensive marketing is conducted. The property is typically advertised online for about a month before auctioning begins. The auction date is set in advance, and bids can be made online. Once the gavel falls, the buyer is legally committed to the purchase and has 28 days to exchange (though the date can be moved). If the buyer changes their mind, you keep their deposit and the property is just relisted.

If the property fails to meet the reserve price, most auctioneers will put this forward to the seller for consideration. If you don’t accept it, the property will simply be auctioned off again at a later date. There’s nothing rushed about the process; it’s simply less complicated than selling through an estate agent.

5. Online Auctions Don’t Generate Interest.

Some people incorrectly believe that buyers simply aren’t looking for properties at online auction sites. This couldn’t be further from the truth. With the potential to achieve a bargain, and at a higher success rate than conventional means, online auctions give better protections throughout the whole process.

A lot more interest can be generated online because it’s highly accessible and can be open to international buyers as well as national ones. Because you’re able to watch bids in real-time, you get a real feel for the auction process as well, which can make for more competitive bidding. At the end of the day, anyone bidding will pay whatever they’re willing to for the property.

Thanks to all the information being readily available at everyone’s fingertips, online auctions provide buyers with easy browsing opportunities, with all the necessary details to hand. A streamlined approach can generate much more interest than conventional estate agent means.

6. You Can Only Buy and Sell in the Auction Room.

This isn’t true. Auctions are designed to be completely flexible, so in actual fact offers can be made and accepted before, during or after an auction. The beauty of the process is the seller has complete control.

Choose the Auction Option.

Now that you’re properly armed with the right information, why not find out more about selling at auction through Keyco? We can answer any queries you might have, to give you the complete confidence in the process, before putting you in touch with the right auction house for your needs.