Will I have to sell at any price?
No, the reserve price is there to protect you. The auctioneer has no authority to sell beneath it.
Is auction only for distressed property?
Not at all. In fact only 16% of lots sold by Allsop last year were from banks or receivers. Auction has become one of the first choice methods for selling higher value homes quickly. Last year saw a big increase in the average lots size for individual homes sold under the hammer by Allsop – up from £349,000 in 2015 to £422,000. The largest home sold in 2016 was a detached 11,300 sq ft mansion in north London. It was knocked down for £4.21m.
Is auction just for bargain hunters?
Whilst everyone likes a bargain, auction is recognised as a great way to establish what a property is really worth in open market competition. That said, there are always cases at every sale of buyers who have managed to secure a deal at less than the maximum price that they had set themselves. But, there will be many others who will have exceeded their limit!
Isn’t it expensive to sell at auction?
Actually it’s no more expensive than selling through an estate agent. Just ask the auctioneer to quote fees. What’s important is your net position after fees – and remember the cheapest advice is not always the best.
Isn’t it just a closed market place for specialists?
That may have been the case 50 years ago. Today, auction is a really popular way to buy a property – whether you’re a first time buyer, moving home, buying a second home or looking for an investment.
Surely auction fails to reach those who can’t attend?
Remote bidding at live auctions is a really popular way of participating. Those who can’t, or don’t want to, attend in person can bid and buy by post (proxy bidding), telephone or take part online. Property auctions are now multi-channel and globally accessible. In fact, in 2016 Allsop’s online catalogue received nearly 1m visits from 197 countries. Almost half of these were new visitors; however, whilst more people are taking advantage of technology to bid online, the most popular method of remote bidding remains the phone.
My property is out of London and you’re a London auction house, so can I still enter it into an auction?
Allsop covers all of the UK and Ireland. As London is the most widely accessible place from any part the country, a London venue is far more likely to attract bigger crowds than any regional auction. Last year 56% of all lots sold by Allsop were outside the M25.
Will bidders know my reserve price?
The reserve price is hardly ever disclosed. It remains confidential between the auction house and the seller. We do give a guide price, which gives an indication of where the reserve is likely to be set on the day. We can’t be misleading though. High reserves and low guides are unlawful. It’s what they call “bait pricing”.
Can the buyer pull out?
No, the buyer is legally bound to purchase and pay a 10% deposit as soon as the hammer falls. If he defaults, he loses his deposit and is liable for all losses.
Do I have to instruct a solicitor?
Yes, you will need to instruct a solicitor as soon as you decide to go ahead with the auction. They will need to put a pack of legal documents together and prepare the conditions of sale.
Will it cost me anything to get advice on price and marketing before going ahead?
Allsop can give you free advice on pricing for sale at auction. A great price on the day relies on competition, so it’s best to price realistically to encourage as many bidders as possible.
Is everything suitable for an auction?
Most properties are suitable for auction sale, but so much is dependent on pricing. For that reason, we would have a frank discussion with you before going ahead.
Can auction get the same price as private treaty?
Most definitely. Bidding can after exceed all expectations, in particular for lots that will appeal to cash buyers. These might include houses or flats in need of work, tenanted properties or development land. Allsop will always be happy to advise before you make a decision
Notes to editor
Gary joined Allsop in 1987 and was invited to join the Partnership in 1991. Since then, he has been head of the Residential Auction Department with Chris Berriman. The department is now the largest residential auction house in the UK and sells up to 2000 lots each year to a value of around £400 million.
Gary is vice chair of the RICS Auctioneering Group, a member of the RICS Auction Legal Review Group and a former member of the RICS Estate Agency Group. He is past chair of the RICS Agency Skills Panel and past chair of the ISVA Auctioneering committee.
Gary is also a director of Allsop Ireland, a joint auction venture with Space Property Consultancy in Dublin, Ireland. He was the first auctioneer to conduct multi lot auctions in the Republic.
Gary is the author of many articles in regular trade press, a frequent speaker at professional conferences and a regular charity auctioneer.
The posts on this blog are provided ‘as is’ with no warranties and confer no rights. The opinions expressed are the author’s own and do not necessarily represent those of their employer.
If you would like to get in touch with Gary, please contact him:
firstname.lastname@example.org or +44 (0)20 7344 2619