The Modern Method of Auctioning a Property
Most of us have vicariously experienced property auctions through the TV. We see the properties go 'under the hammer' in the auction room, in front of a roomful (or partial roomful) of reasonably-interested-looking bidders, and then we watch as the lots are transformed into improved homes that can be sold at a profit or put on the rental market.
But this traditional way to auction a house is somewhat outdated now. Traditional auction sale rooms are relics of a bygone era. A time when buying an auction property meant travelling once every few months to sit in a room where around 20 lots would be sold over the course of a few hours.
Now, and perhaps most significantly, post pandemic, auction bidders and buyers are used to the concept of online bidding, so that buying auction properties remotely, from the comfort of their own home, office or even from their car or a restaurant, seems like a far more reasonable way to spend their precious time.
Yes, remote bidding is one serious selling point for buyers, but how do sellers benefit from this modern method of auction selling?
How property auctions used to work
Before the pandemic, house auctions had worked in much the same format since the first auctioneer decided that live auctions were an effective way of selling things in a relatively quick and certain way.
Each auction house would generally organise an auction around six to eight times a year and, properties would be bundled into a single sale date, marketed and then offered to a roomful of potential bidders (and the odd phone or proxy bidder) in a set sequence of sales.
Typically, each sale would last just a few minutes and while some auctioneers would say that this drives the competition and promotes hard bidding (which may push the selling price up), this is only true in a limited number of instances.
Lockdown restrictions changed things of course and almost all auctioneers took their auction sales online, but, since restrictions were lifted, many of them are now going back to the old ways and we can't help wondering why.
We feel that this traditional method has a number of serious limitations, and this is why we knew we did not want to go back to the auction room. It was time for something new.
Here we explain why – Let's look at what happens in the two methods for auctioning a home.
Traditional auction sale
Each property is listed as part of a collective auction which scheduled for a specific date.
The lots are marketed.
On the day of the auction, each property is allocated a slot in a sequence chosen by the auctioneer to garner anticipation and enthusiasm – your property may not always be in the best position in the running order.
The bidders present (either physically, on the phone or by proxy) can bid on any of the available lots.
If the bidding outstrips what the bidders have available in cash/liquid funds on the day to pay the deposit and fees, they will be unable to buy the property.
The bidding ends in a few minutes.
The successful bidder must sign an unconditional contract on the day and pay a 10% deposit, plus fees.
The purchase is complete.
Modern method auction – sale by tender
An online auction date is chosen to suit the property, current market and the seller's needs. At Higgins-Drysdale, we hold auctions every Friday, giving us maximum flexibility when picking the right auction date.
The auction lot is marketed singly, for the most appropriate amount of time and in all appropriate places. Straightforward freehold auction lots usually need two to four weeks of marketing time, while more complex lots such as leasehold and tenanted properties need around four to six weeks marketing time.
Registered bidders can attend a block viewing of the property on set dates as advertised in the marketing details.
Each online lot is auctioned over a set timeframe. We use a two-hour window which gives potential buyers plenty of time to register to bid even if the bidding has started, whilst maintaining the time compression that drives enthusiastic bidding.
When the auction ends, the seller pays the auction fees and commits to exchanging contracts within 20-working days – known as a conditional sale. This gives the buyer time to arrange finance, surveys and a solicitor, making the process a less risky prospect.
All the best bits of a traditional auction with a modern twist
We believe that the Higgins-Drysdale brand of modern method auction keeps all the benefits of traditional auction sales and combines modern technology and years of skill to deliver a more efficient platform for both sellers and buyers of investment properties alike.
Our mission is to focus on you as a seller and your individual property. We find out about your needs and circumstances and we take time to explain the full process from start to finish.
We are committed to providing best-advice and this means we will always advise you of the most appropriate marketing and selling methods for your property. It's what suits you, not what suits us that's important in our property auction model.
You can book a no-obligation Property Sale Appraisal today. During this phone consultation (which takes about 20 to 45 minutes) we will obtain all the information we need to appraise your property so that we can advise you of the best methods for sale and the most appropriate valuation. To auction a house or a flat, or any type of property with Higgins Drysdale, contact us today – we're happy to chat.