Property Auctions – Common Questions
Property auctions are often misunderstood, with a number of common myths around pricing, risk and how the process works.
Understanding the reality behind these questions can help you decide whether auction is the right route for you, whether you are buying or selling.
Do auction properties really sell below market value?
Not necessarily. While some properties may sell below asking price, this is not a rule.
Auction prices are driven by demand and how much buyers are willing to pay. A commercial property might not appeal to most buyers, but could be just the thing for a business owner looking for new premises.
Understanding who a property will appeal to is vital regardless of whether you are selling through private treaty or at auction.
The Edward Mellor auction team takes pride in being able to sell any property in any condition. This is achieved by leveraging expert market knowledge and a database of invested buyers to market every property to those who are most likely to show a genuine interest.
This, combined with our proven auction method, ensures that our auction events are lively and driven by competitive bidding from invested buyers.
When multiple buyers compete, bidding can push the final price to – or even above – market value.
It’s also worth thinking about seller motivations. In some situations, such as during a break-up, winding down a business or selling at probate, price might take a back seat to speed.
Auction is the fastest way to sell property for a fair price, which is one of the reasons auctions continue to grow in popularity.
Setting a Reserve Price
Whatever the motivation for selling at auction, every property sold by Edward Mellor will have a unique reserve price that is agreed with the vendor prior to sale.
A reserve price is the lowest amount that a property will be allowed to sell for. If this amount isn’t met, the property will not sell.
This gives vendors the peace of mind of knowing that their property will never sell for less than they are willing to accept, regardless of their motivation for sale.
If you’re thinking of selling at auction and would like to understand what your property could be worth, as well as a clear marketing strategy, book a free auction appraisal today.
What problems do auction properties usually have?
Auction properties can sometimes need work or come with added considerations, such as renovation, short leases, unusual legal titles or sitting tenants.
However, keep in mind that one person’s ‘problem’ is another’s opportunity. A home with sitting tenants might not appeal to residential buyers, but may be ideal for a landlord adding to their portfolio.
It’s also important to remember that not every auction property has a catch. Many are sold at auction because the seller wants a faster, more certain sale with a clear completion date.
The key is to review the legal pack carefully, arrange any necessary checks, and complete your due diligence before bidding.
How risky is buying a house at auction?
Buying at auction is not inherently risky, but it does require preparation.
The process is clear and legally binding. When the hammer falls, contracts are exchanged immediately, and the buyer is committed to completing the purchase.
The main risks come from bidding without reviewing the legal pack, inspecting the property or arranging finance in advance. These can usually be managed by instructing a solicitor, arranging any necessary surveys or viewings, and making sure funds are ready before auction day.
When approached properly, auction can be a clear, controlled and transparent way to buy property.
Can you negotiate after an auction?
Yes – in certain circumstances.
If a property does not reach its reserve price, it will not sell on the day. However, this can lead to post-auction negotiations between the seller and interested bidders, which may result in a sale being agreed shortly after the auction.
In some cases, buyers can also make pre-auction offers before the auction takes place. These may be accepted if they meet the seller’s expectations.
However, once the hammer falls and the reserve has been met, the sale is legally binding and cannot usually be renegotiated.
Is auction better than buying through an estate agent?
It depends on your priorities.
Auction offers a fixed timetable, often with completion taking place in around 28 days. Contracts are exchanged immediately on the day, bidding is transparent, and there is a reduced risk of the sale falling through once a buyer is secured.
Buying or selling through an estate agent can offer more time to arrange finances, more flexibility for negotiation and a less time-pressured process.
Auction is often better suited to buyers and sellers who want speed, certainty and a clear structure, while a traditional sale may suit those who need more flexibility or time.
Contact Edward Mellor Property Auctions
If you are considering buying or selling at auction and want clear, professional guidance, the Edward Mellor Property Auctions team is here to help.
We can advise on whether auction is the right route for you, support you through the full process, and market your property to attract serious buyers.
As one of the largest and most successful auctioneers in the North West, we combine experience, reach and a personal approach to deliver results.
Get in touch today to discuss your property or learn more about how auctions work.
Related Pages
How do Property Auctions Work? | Common Auction Conditions | Buying a House at Auction | Selling a House at Auction | Auctions | Edward Mellor