IS AUCTIONING YOUR HOUSE A GOOD IDEA?
There are a lot of ways to sell a house like hiring an agent, with the help of realtors, offering open houses, by selling yourself and auction. Every way has its pros and cons, but these days auction is held in a market with both a selling and buying point of view.
In the last few years and especially in this situation of COVID-19, the house selling and buying market is highly affected. Most of the buyers lost their jobs and face a lot of problems regarding money. For sellers, an auction was never their priority but these days auction feels a good method for selling and buying
In this article, I will explain the auction in terms of both buying and selling. If I talk about sellers, they prefer this method because they often get a better amount in less time. But it also has some disadvantages which I will explain later in this article.
IF YOU ARE SELLING
The dreaded reserve
Sometimes, you won’t be able to get your desired amount while auction your house, but you can’t help with that. Such a situation puts you in a miserable state of mind. Sometimes your property is overvalued. At that time, you are overwhelmed with joy by getting that better amount.
Sometimes out property does not belong to the auction. This means that buyers are not interested in this type of property. In that case, you have to pay an auction fee regardless of your property selling.
No cold feet
This shows a situation. Sometimes when the hammer falls and a decision will be locked then you won’t be able to do anything. But if you are in a crowded room with a lot of people and voices, come from all around then this rush can save you from a lock situation.
If you are sure enough then this condition won’t be a problem for you. You will be mentally prepared for it; your property will be of someone else in minutes.
When you want to auction your property, do some homework. Follow the market strategy and try to spread the news of your house’s auction. This will help you to get many buyers. Probability of finding a good rate for your house increases.
You are the one who needs to think about the marketing of your house because auctioneers do not bother much about the marketing. By marketing, you can get some serious buyers who can buy your house at a good price.
Less number of buyers
If we compare the number of buyers in an auction, through an agent, and open houses. The number of buyers in the auction is way less. Most of the buyers do not feel an auction is a good option because in an auction thing happen minutes and this is not the best idea to deal with the biggest assets in life.
If you want to sell your house fast, you can use some websites and home buyer’s offers. It is better than auction as it has no fees and has sale guaranteed, you can also think about the decision feely.
IF YOU ARE BUYING
Guide price and reality
When you look at the list of houses listed for auction, there is also a guide price mention there. Focus on that figure because that is the most important price. That price is the price which sellers expect or sometimes auctioneers put the least price which a seller wants.
Original price can be varied from guide price. It depends on the audience who wants to buy the house. Do not be surprised if the original price will be more than the guide price. Sometimes original price increases up to too many thousand pounds.
This is the most important step of the auction. If you are mentally preparing for that before and you walked in with enough money for the deal then there won’t be any problem.
But if you do not have enough sources, and one hammer falls then you will be in great trouble. Once the hammers fall then that price will be locked. If it is of your price then you will be ready to meet the deal.
Money is the most important thing while you are on your way to make a deal. You should have enough money before you go to auction. It is not only about managing debt but also about the financing of a new property.
Auction has the advantage that you do not need to pay the full amount on the spot. You need to pay 10% of the amount on the spot. Then you need to clear the balance, the full price of a property, after the day of the auction.
For walking into the auction confidently, you should be ready mentally and financially. A mortgage is all about luck so if you are lucky enough to get the house, you need to pay on the spot.
If you do not have enough money, you should not go for it. This causes embarrassment and even auction companies can take action against you. So, take care of all the above things.
Management of time
When you are looking for a property at auction, there are various ways to know about that. Different auction companies publish their online and offline catalogs where they show a lot about the properties ready for sale.
If you are interested in some property, you need to complete all the tasks before the day of the auction. This process is very stressful if you are interested in some property, you need to do a complete survey.
A survey has to be done and completed before the day of the auction. This won’t be a problem if you have three or four weeks. But it can be a problem if you have less time. Because if you are not done with the survey then it can create a lot of problems for you.
You also need to consult a solicitor for all the legal terms. Solicitor’s input is very necessary if you have even only one property. Usually, solicitors have a packed schedule due to caseload so this is also a time-taking step. So, if you are interested in some property, you have to manage your time accordingly.
By considering all the above details I concluded that auction is not that good for you. For an auction, you need to consider all the things like time management, money, and legalities. Also, the number of buyers is way less than the number of buyers through agents, realtors, and open houses.