The main differences between selling property at auction and selling via estate agents are:
- Auction has a fixed timescale for exchange and completion (typically 28 days at auction vs six months average via estate agents)
- Properties are valued differently by auction houses versus estate agents (more details on this below)
- Generally, auctions can provide more speed and certainty than selling via estate agents
- The decision to sell at auction is usually determined by factors related to the property or seller's circumstances
- Buyers cannot pull out or attempt to renegotiate their sale price after the auction (without significant penalties)
Auction has a fixed timescale for completion
The main difference between selling property at auction and selling via estate agent is that auction has a fixed timescale for exchange and completion. Auction will usually see exchange occur on the fall of the hammer on the auction date, and completion/key handover typically occurs 28 days later.
Private treaty may see a sale agreed quicker, however there is no fixed timescale for exchange or completion, and current reports state that it can take six months on average from sale to completion. Find out the differences between exchange and completion.
Properties can be valued differently
An estate agent will usually suggest a higher price and seek offers from buyers at or below the asking price. After an initial period, they may advise the seller to lower the asking price step by step until buyer interest is generated.
By comparison, an auctioneer will guide a property at a more attractive price, which generates interest from multiple buyers; by doing so and using the bid-up process in an auction environment, the final selling price for suitable auction lots will be similar to or exceed those achieved via estate agents.
Decision to sell, speed and certainty
Often the decision to sell by auction is determined by factors associated with the property or the seller’s circumstances. Auction provides speed and certainty; an auction property will usually be sold with an immediate exchange of contracts within three to six weeks of it being entered, with completion normally taking place four weeks later.
Buyers cannot pull out or renegotiate without consequences
- Buyers cannot withdraw without penalties from the sale after winning a property
- Buyers are not able to renegotiate a lower price after winning the property at auction
- In unconditional auctions the sale is agreed and contracts are exchanged when the hammer has fallen
If the buyer, for any reason, fails to complete their purchase of the property within the timeframe, they risk significant penalties.