Property Auctions or Property Buying Companies?

If you find yourself in need of a quick sale and time isn’t on your side, many believe property auctions to be one of the fastest ways to sell your home. Let the buyers out bid each other and they’ll drive up the price. Well this can be the case, but you need to be informed what you’re doing and ensure that everything goes smoothly at the auction.

Why sell a house at auction?

If you need a quick sale and you can’t afford for a buyer to back out, then auctions are an option. Normally at the end of the auction the buyer needs to put a 10% deposit down and this is effectively an exchange of your property and the successful purchaser has 28 days to complete from that date.

How does this compare to Property Buyers?

Advantages of Property Buyers 

  • Property Buying Companies can generally assist any sell house fast requirement and can buy properties in as little as 7 days ( the average tends to be approximately 2 – 3 weeks ).

  • Property Buying Companies when buying properties pay for ALL sellers fees: legal fees are paid, valuations are paid, surveys are paid and there are no estate agency fees to pay.

  • Regulated property buying companies are governed by the Property Ombudsman.

  • A property buying company can buy any house in any condition. A fast house sale can still complete regardless of whether a property is structurally ok or not.

  • There are no fees to pay at all when they purchase your house.

  • Timescales are not an issue to property buying companies.

Disadvantages of Property Buying Companies

  • Homeowners receive less than the market value. Generally they will receive a better price for a quick house sale than an auction would receive. Homeowners generally receive approximately 80-85% of the market value for their home and all their seller fees are paid.

  • A sale is only legal once it exchanges so up until that point a property buying company can withdraw at any time up to that point.

Advantages of Auctions

  • There is a good opportunity to increase the sale price.

  • There is a marketing programme which normally runs for a month before the auction to try and collect interest in the properties.

  • The Sale period from contacting the auctioneer through to completion is generally 10 weeks.

  • Unconditional sale secured on auction day.

Disadvantages of Auctions

  • Auctions are an expensive method to sell your property, with fees most often around 2% of the sale price.

  • Auction sales are not particularly quick by the time you add the initial marketing before the auction and then following completion of the sale, a total sale can be around 10 weeks. This is not always helpful when you need to sell your house fast.

  • Auctions are often seen as a desperate last ditch approach to sell your property fast and for this reason, homeowners don’t generally receive the best offers, generally around 70-75% of the market value.

  • If you try to sell your house quick through an auction and it doesn’t sell, you can end up with a property that has been marketed at a low price. This can end up being effectively impossible to sell your property at a later date.

In conclusion, selling your property fast is never an easy option and the option is really up to the owner. The auction option is always a high risk route as you never know what you will achieve on auction day and you don’t know if the property will sell at all. The timescale of approximately 10 weeks is a lot longer than the property buying company route, as this is often can take just 2 – 3 weeks.

If you want a no obligation valuation and cash offer please get in contact.

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