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Hammer time: when selling at auction ends in disaster

Auction flag, auction day

More than 35,000 homes are auctioned in the United Kingdom each year on behalf of anxious vendors looking to achieve the best price for their property.

Auctions rose to prominence as the preferred method of sale for repossessed properties in the early 1990s, but now auctions are popular among all vendor types.

In more recent times, auctions have provided a fantastic means for extracting more value for your property by pitting prospective buyers against one another in a competitive environment.

But for every successful auction there is bound to be a vendor with an equally negative approach to auctions. The following list of auction disaster stories may have been easily avoided with the correct choice of estate agent.

Your home sells for below market value


The auction process requires a considerable investment of time and finance from a homeowner. For this reason, some vendors feel pressured to accept the best price they receive on auction day, even when it’s below market value.

It pays to do your homework early on in the process in order to understand whether auction is right for you. In the United Kingdom, auctions have traditionally been a successful means for offloading a renovator’s delight, unusual homes or in-demand properties with multiple prospective buyers. With the growing popularity of auctions, it was inevitable that some vendors may be left by the roadside.

On LocalAgentFinder.co.uk, you can compare sales strategies from market-leading local agents in your area to decide on the best way to sell your home. 

Your home doesn't sell


In spite of setting a competitive reserve price and staging your property for sale, your home may still pass in at auction. This is one of the biggest disasters associated with selling your home via auction because: 

  • You’re still liable for your auctioneer’s marketing and advertising fees. All of those glossy brochures, for sale signs and print advertisements can add up to thousands of pounds of wasted money if the hammer doesn’t fall on auction day. Worse still, you may also have to pay to have your solicitor present to answer any last-minute questions from buyers. 
  • Future buyers have a direct insight into how much your property may be worth after it fails to sell at auction. It’s inevitable that prospective buyers will view your home as ‘stale’ in the immediate aftermath of a failed auction campaign so it’s important to convince prospective buyers that you are genuinely interested in selling your home. You can do this by providing a clear indication of your asking price and launching a targeted advertising campaign with different images and description.
  • If your home sells for well below the reserve price, then this could represent a significant issue with your chosen agent. The reserve should reflect a reasonable market value that buyers are willing to pay on auction day. An overpriced reserve creates unrealistic expectations about how much your property is worth. To overcome this, request an independent property valuation before setting the reserve price for your home.

Your buyer reneges on the offer


Buyers have been known to walk away from a home purchased at auction despite the legal ramifications associated with doing so. Some bidders can fall into trouble after successfully buying a property at auction when they encounter difficulties obtaining finance after. Other buyers renege on their auction contract after discovering a property has previously unknown faults and defects.

The one positive side of this scenario is that you get to keep your buyer’s deposit should the deal fall through. You may also pursue further litigation, however this represents an extremely costly scenario unavailable to most vendors.

They ignore your expectations


As a vendor, you will have strict criteria in terms of the expected costs, settlement date and financing requirements associated with selling your home. In this regard, it is extremely important that you are clear about how you would like your property to be sold.

From the outset, you should understand how much commission an agent will charge you and all applicable costs. This will either take the form of a percentage of the property’s sale price or a flat commission rate. 

It is also important that your agent provides a realistic picture regarding the likely sale price for your property. It may seem attractive to employ the agent that guarantees the highest selling price for your home, but this doesn’t always transform into reality. A good agent will provide frank and honest selling advice.

How can LocalAgentFinder assist with the auction process?


On LocalAgentFinder.co.uk homeowners request and compare information from leading estate agents in their area when deciding who should list their property. 

If you’re planning to auction your home then LocalAgentFinder allows you to view targeted proposals from estate agents detailing their sales strategy, commission rate and experience in your area. The LocalAgentFinder comparison process is 100% for homeowners in the UK.
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