Selling a property at auction can give you a clear timetable and, at a traditional auction, a binding sale on the day. It suits some properties and some sellers better than others. The key difference from a normal sale is that the legal work comes first: your legal pack needs to be ready before the property goes into the catalogue, because buyers rely on it when they bid. This guide explains when auction makes sense, the choices you will make with the auctioneer and how we prepare your sale.
When does selling at auction make sense?
Most homes are sold by private treaty through an estate agent. You accept an offer, the conveyancing starts, and either side can pull out until contracts are exchanged. Auction changes that. At a traditional auction, the buyer is committed the moment the hammer falls. That certainty is the main reason sellers choose it.
- Certainty and a set timetable
- You know the auction date and, at a traditional auction, contracts are exchanged on the day with a completion date already fixed.
- Unusual or problem properties
- Properties needing major work, with structural issues, short leases, title defects or no obvious market value can attract investors and developers who buy at auction regularly.
- Probate and estate sales
- Executors often want a clear, transparent sale process that shows the property was openly marketed. Our guide to selling as an executor covers the wider duties.
- Repossessions and investment property
- Lenders, receivers and landlords use auctions to sell tenanted or vacant property quickly and openly.
Auction is not right for everyone. The price is set by the bidders in the room, or online, on one day, and some buyers avoid auctions because of the commitment and the need to have finance in place. A good auctioneer will give you an honest view of whether your property is likely to do better at auction or on the open market.
Traditional vs modern method of auction for sellers
- Traditional (unconditional) auction
- Contracts are exchanged when the hammer falls. The buyer pays a deposit on the day and completion follows on the date in the conditions, usually around 20 working days or 28 days later. This gives the most certainty for you as the seller.
- Modern method of auction (conditional)
- The winning bidder pays a reservation fee and then has a set period to exchange and complete, typically 28 days to exchange and 28 days to complete, though terms vary. It opens the sale to buyers who need a mortgage, but the buyer is not bound until exchange, so there is more risk of the sale falling through.
Some auctioneers offer both, and some sell through online auctions that run over several days. Ask the auctioneer to explain which format they recommend for your property and why, and what happens if the buyer does not proceed.
The auction agreement, fees and costs
Before your property is listed, you sign an agreement with the auctioneer. Read it carefully, as it sets out what you pay and what you are committing to. Things to check include:
- the entry fee to include your property in the catalogue, and whether it is payable even if the property does not sell
- the auctioneer’s commission on a sale, and whether it applies to sales agreed before or after the auction
- marketing costs, such as photography, boards and online listings
- how long the agreement lasts and whether you can withdraw the property, and at what cost
- whether the auctioneer can sell the property after the auction if it does not reach the reserve
- who holds the deposit and when it is released to you
You will also have legal costs for preparing the legal pack and handling the sale. Some sellers ask for the buyer to contribute to these through the special conditions. That is common at auction, but it is a cost the buyer factors into their bid, so it is worth discussing with the auctioneer.
Reserve price and guide price explained
The reserve price is the lowest price you will accept. It is confidential between you and the auctioneer and is usually agreed shortly before the auction. If bidding does not reach the reserve, the property is not sold in the room.
The guide price is the figure published in the catalogue to give buyers an idea of the expected price. It can be a single figure or a range. Advertising guidance for auctioneers says the guide price must not be below the reserve, and a guide range should not start below it either. So the reserve and the guide price need to be set together, and if you change the reserve, the guide price may need to change too.
Setting realistic expectations
A guide price set too low may attract interest but frustrate buyers if the reserve is much higher. Set too high, it can put bidders off. Your auctioneer will advise on both figures, and you should feel comfortable selling at the reserve before you agree it.
Preparing the legal pack before the catalogue
The legal pack is the information buyers rely on when they decide whether to bid. At a traditional auction, buyers have no chance to raise questions after the hammer falls, so the pack has to answer them beforehand. We prepare it before your property is marketed, so it is ready when the catalogue goes live.
A good legal pack usually includes:
- up-to-date title documents from HM Land Registry, or the deeds if the property is unregistered
- local authority, drainage and water and environmental searches
- completed property information forms, or replies to standard enquiries, and a fittings and contents form
- the lease and information from the landlord or managing agent, for leasehold property
- tenancy agreements and rent details, for tenanted property
- planning permissions, building regulations certificates, guarantees and warranties
- the special conditions of sale, covering anything specific to your property and any costs the buyer will pay
The auctioneer will also have general conditions that apply to every lot. Special conditions sit on top of these. We draft them to deal with any issues we find, such as a missing document or an unusual right of way, so that buyers know where they stand and you are protected.
Why a complete pack helps you
Buyers and their solicitors look at legal packs before deciding which lots to bid on. A complete, well-organised pack answers their questions, reassures lenders and makes it easier for more people to bid with confidence. Gaps tend to put cautious buyers off or lower what they are willing to pay.
Much of this is the same information you would gather for any sale. Our Home Sale Pack and selling service is built around getting it ready early, which is exactly what an auction needs.
What happens on auction day
- Final checks and the addendum. Before the auction, we check whether anything has changed. Any late corrections or new conditions go into the auctioneer’s addendum, which forms part of the contract.
- Bidding. The auctioneer offers the lot. If bidding reaches the reserve, the property can be sold to the highest bidder.
- Exchange on the hammer. At a traditional auction, contracts are exchanged when the hammer falls. The sale is then legally binding on you and the buyer.
- Deposit paid. The buyer pays the deposit, commonly 10% of the price, which the auctioneer usually holds until completion under the terms of the conditions.
- Contract signed. The contract or memorandum of sale is signed, and the auctioneer sends a copy to us and to the buyer’s solicitor.
- Completion. On the completion date in the conditions, the buyer’s solicitor sends us the balance. We repay any mortgage, pay the auctioneer’s fees if agreed, and send you the rest. The keys are released to the buyer.
Once contracts are exchanged, you must keep the property in the same condition and comply with the conditions until completion. If the buyer fails to complete, the conditions usually let you serve notice, keep the deposit and resell. We advise you on your options if that happens.
What if the property doesn’t sell at auction?
If bidding doesn’t reach the reserve, the property is unsold in the room. That is not always the end. Auctioneers often try to agree a post-auction sale with interested bidders in the hours or days afterwards, usually on the same conditions as the auction. The buyer exchanges straight away, pays the deposit, and the sale proceeds as if it had sold in the room.
You may also decide to re-enter the property in a later auction, revisit the reserve, or move to a private treaty sale. Some auction agreements limit what you can do for a period, so check the terms before deciding.
Mortgage redemption and tax
- Paying off your mortgage
- If the property has a mortgage, we get a redemption statement from your lender and repay it from the sale money on completion. Check with your lender about any early repayment charge. The auction price needs to be enough to clear the mortgage, or you need to be able to make up any shortfall.
- Capital gains tax
- If the property is not your main home, such as a buy-to-let, a second home or inherited property, you may have capital gains tax to pay, and there can be a short deadline to report and pay it after completion. Check GOV.UK and take advice from an accountant before the auction.
- VAT
- This rarely applies to homes, but if VAT may be charged on the sale, it must be dealt with in the conditions before the auction.
How we help you sell at auction
We work with you and your auctioneer to prepare the legal pack before the catalogue deadline, draft the special conditions, answer pre-auction questions from buyers’ solicitors and handle the sale through to completion. Tell us as soon as you are thinking about auction, as the pack takes time to assemble. Find out more about selling with us, or read our guide to buying at auction to see the process from the buyer’s side.
Common questions
It can be, but it depends on the auction date and how quickly the legal pack is ready. At a traditional auction, contracts are exchanged on the day and completion usually follows within about four weeks. With a private treaty sale, the timescale depends on the buyer, their lender and any chain. Auction gives you a clearer timetable, rather than a guaranteed quicker sale.
The reserve price is the confidential minimum you will accept. The guide price is the published figure that tells buyers roughly what to expect. Advertising guidance says the guide price should not be lower than the reserve, so the two are set together. If bidding doesn’t reach the reserve, the property is not sold in the room.
At a traditional auction, the buyer usually pays the deposit to the auctioneer on the day. The auctioneer normally holds it until completion under the terms of the auction conditions, then releases it to the seller. The exact arrangement depends on the conditions, so check the auctioneer’s terms and your agreement with them.
Yes. The legal pack should be ready before the catalogue is published, because buyers review it before deciding to bid. Your solicitor gathers the title documents and searches, prepares the property information and drafts the special conditions. Instructing a solicitor early gives time to sort out any issues that might otherwise put buyers off.
At a traditional auction the buyer is in breach of contract if they don’t complete on time. The auction conditions usually allow you to serve a notice to complete. If the buyer still doesn’t complete, you can normally end the contract, keep the deposit and resell, and you may be able to claim further losses. We would advise you on the options.
Usually, yes, before it is sold, but your agreement with the auctioneer may charge fees or commission if you withdraw, especially close to the auction or if you then sell privately to someone introduced by them. Read the agreement before you sign it and talk to the auctioneer as early as possible if your plans change.
What will your move cost?
This guide is general information, not legal advice for your situation. Have a question? Read our FAQs or ask us.
