Is it Possible to Auction My Home Online?

UK Housing Market

Houses that are up for auction are commonly thought of as having been abandoned or repossessed. As it turns out, this is simply not true. You may sell your property at auction, no matter how large or small it is, or how luxurious or antiquated the inside is. So, if auctioning your home online is not something you have considered before, read on to find out more.

When most people think of real estate auctions, they tend to picture a roomful of people listening to an auctioneer ramble off house prices before the hammer falls on the successful bidder. Online home auctions, on the other hand, have grown in popularity as technology has evolved and more services have moved online. The trend of online auctions indicates that it will only increase in popularity in the coming years.

How should I go about selling my house online?

If you shop around, you will find that there are a number of online auction services available to help you sell your house. Once they have guided and agreed with you on an “undisclosed reserve” price and a guide price, they will then be ready to put your home up for auction. You have two choices: hire a traditional high-street estate agent to value your home; or do some online research for comparable properties in your location to obtain an estimate of what your home is worth so you can set a reasonable reserve price.

Before the sale can proceed, a legal pack containing all of the necessary property paperwork must be assembled and obtained from a solicitor with relevant experience. Auction houses can sometimes provide referrals for legal counsel to get you going. There are plenty of experienced companies out there that can assist you with your auction, so it’s worth asking around and comparing prices as well as their contract terms.

Potential purchasers will then start to submit bids on the property once it has been advertised for sale. Many auction home sellers find it quite exciting since bids may be seen coming in real time as they are made online. After meeting the reserve price, the house is then sold, and the winner must immediately pay a deposit to secure the deal. Within a predetermined period of time, the remaining balance will be paid in full.

Undisclosed reserve price

If the bids don’t meet or exceed your reserve price, you are not obligated to sell your home. This is the minimal price you’re willing to accept for your property. As the name alludes to, bidders aren’t aware of the reserve price which has been set, so the bidding isn’t skewed toward a specific amount. This is often a good way to sell something because it usually leads to more bids and higher offers.

Typically, many auction service providers require that the reserve prices be within 10% of the guide price – the price that is advertised at the commencement of the auction. It is a good idea to set the guide price below the market value, as this tends to stimulate greater attention from bidders and gets them interested in placing live bids against one another from the outset. As many online home auctioneers will attest to, this will often pay dividends by pushing up the final sale price compared to starting with a lower guide price.

The advantages and disadvantages of selling a house at auction online

The Pros

When you put your home up for auction, you will know that the bidders must have their finances in order to acquire a property at auction. When a bidder wins the bid, they are legally required to pay the predetermined deposit, which is typically 10% of the transaction price. The auctioneer will establish a time limit for the final payment, normally within 28 days, although this can vary. Because of this, auction homebuyers are less likely to walk away from a deal because they have already paid a deposit to secure the property. There is a powerful incentive for the winning bidder to complete the sale with the final payment because, if a deal does fall through, the seller gets to keep the deposit.

Online property auctions might be handy if you want to sell your house in a hurry, such as if you have inherited a property. During the auction, as long as you get an offer and the bidder doesn’t retract their bid, you will know exactly when the transaction will be completed. Depending on how the market is doing, it could take a traditional real estate agent several months to sell a house, but it usually only takes a few days at an auction.

Using online house auctions might help you sell a property faster if you can’t afford or don’t have the time to fix it up before listing it on the market. Buyers at auctions are more likely than the general public to be interested in redeveloping a home, so you’ll have an easier time selling these kinds of properties compared to those on the open market.

You won’t have to pay for room rental or printing costs when you participate in online property auctions, unlike traditional auctions that come with cost implications. It’s also easier and more flexible to change the sale price or reserve price if the situation calls for it.

Using an auction house to sell your home might save you time and money compared to going through a regular estate agent, but some auction houses do charge a fee. Shop around to see what deals are on offer, and be sure to find out if they charge any fees and what they will do for you.

The Cons

Unfortunately, there is no certainty that a property will sell at auction. If a buyer backs out after paying the deposit, you may be required to pay again to re-advertise the property. However, the good news is that you will have the deposit from the previous buyer, which you can use to pay for this.

Auctions often cost between £2,000 and £3,000 to sell a home. These fees will be due before your home goes to bid, with a price of roughly £1,000 upfront and an additional £2,000 for a legal pack. You will also need to factor in paying a 2.5 percent plus VAT on the deposit that you receive. As an example, the auctioneers would get £450 if you received 10% down on a home that sold for £150,000. Having said this, there are some online home auctioneers that will not require any fees at all.

Another thing to keep in mind is that, at auction, your house may not sell for the price you want. As a way to get you enthused about selling your house, some sellers will overvalue it, hoping this will entice you to go with them. To mitigate the risk of this, tell your auctioneer that you are looking for a realistic price and ask them how they came up with the price they suggested.

Selling your home on eBay

For those considering the option of online auctions, it’s a common misconception among house sellers that the only place to list their property for sale is on eBay. Many people are using the e-commerce behemoth to sell their houses at auction. These listed properties, on the other hand, are frequently second homes or vacation getaway properties.

There are no restrictions on the types of properties or homes that may be auctioned on eBay, and the number of people doing so in the United Kingdom has increased significantly in recent years. A one-time fee of £35 for eBay listings is a fraction of the commission estate agents charge. If your house sells, PayPal will charge you 3.4 percent plus a 20 pence flat rate fee on the final auction price. As a result, if you sold your house for £300,000, you’d pocket £289,764.80 while shelling out £10,235.20 in costs. Legal fees will have to be taken into account, as the transaction will need to be legally enforceable.

You may potentially wind up paying more by auctioning your home on eBay than you would if you were to sell it through a traditional real estate agency, which charges between 0.75 percent and 3.0 percent plus VAT.