How to Sell Your House at an Auction

An auction is a popular selling method for houses, especially for the owners of foreclosed homes, due to its many benefits. It is the quickest way with the highest guarantee of sale. Here are some guidelines that will help you determine whether you should auction your house or not.



Which Properties to Sell

There are several types of properties that are best sold at auctions rather than under normal circumstances. They include:



Houses that are hard to sell through conventional means: There are certain types of houses that simply can't be sold through the open market fast. These include those that are in really bad shape and have received no repairs over the years, properties that have very unorthodox designs and those that don't receive good advertisement. All of these types could have a fair chance of getting sold through an auction.



Houses that have no definite value: These are houses that are marked for their distinctiveness but are rather hard to sell on the open market.



Foreclosed houses: Owners of foreclosed homes usually resort to auctioning their houses for faster sale to compensate the expenses, the unpaid bills and sometimes even to save the house itself from being foreclosed.



Highly-demanded properties: Popular houses get exceedingly higher selling prices when auctioned.



Evaluation Period

This entails the process of assessing your property and the potential auctioneer/s. Before you decide to sell it at auction, it is best to shop around for auction houses that fit your requirements. Have your property evaluated first so you'll know what is the reserve price of your house and the total value you should get after the auction. Then, check the price range of the properties that the auctioneer offers. This way, you'll be able to increase the possibility of getting a satisfactory deal for your property.



Properties at auctions are sold as-is but the owner has the option to increase its value first. For example, repairs, doing a bit of cleaning and restoring the property will actually increase its selling price.



Knowing the Cost

Auctioneers don't come free. They charge their clients for the brochures, advertisements and the general services they provide whether the house is sold or not. Also, you might pay a minimum commission of 2.5% from the sale of the house. To get around the unsolicited expenses and the payments that you may not expect before and after the auction, negotiate well with the auctioneer and read everything before signing anything.


Selling Proper

Before offering the house for auction, set the reserve price first - this is the starting bid for the property. Consult with your auctioneer before setting the reserve price. Second, arrange the contract. Finally, prepare the property for viewing by willing bidders.



Selling itself will occur during the auction. Potential buyers will bid on it. The one with the highest bid wins and the sale is official and legally binding.

How to Sell your Item at an Auction?

The process of selling an item at an auction is pretty straightforward. You choose an auction house, know the conditions before signing an agreement, and stand back and wait until your item is bought.



Choosing an auction house is crucial for the sale of your item. Landing a wrong one greatly reduces the chances of getting a favorable sale. As much as possible, pick an auction house that sells items similar to yours within the same price range. There are privately-run auction houses that sell specific items such as jewelry, antiques, artwork, vehicles, or vintage cars. There are others that sell miscellaneous goods. Do some thorough research on the auction company carefully before selling your items through them.



Knowing and understanding the conditions set by the auction house before signing an agreement is important.



There is a cost in placing your item in an auction. One is the commission of the auction house on the sale it has made on your behalf and the other is for the advertisements in catalogues and brochures regardless of whether your item is sold or not.



Keep in mind the things you need to prepare including the reserve price, the contract, and opening your property for viewing (especially if it's a house).



A reserve price is the lowest amount at which you are willing to sell your item. To determine how much your reserve price is, you need to have your property appraised. It is based on the actual market value of the item you are selling. It protects you from selling your item when the final bid is lower than your intended amount of sale. Auction houses charge a fee when setting a reserve price.



The contract contains your terms and conditions of the sale which should be prepared by the solicitor of the auction.



If you are selling a property, have it opened for viewing. This allows potential buyers to inspect the condition of the house.



Once the auction starts, you have no control over your item. An auction is a highly volatile marketplace and the final price is dictated by the bidders. You may get a good deal but if the demand is low, you might end up selling your item at a low price.



One important fact: Whether your item is sold or not, you will pay the auction company. Calculate carefully if it is worth it to sell your items through an auction.