Sellers Guide to Auctions

Why sell at auction?

There are two main advantages to selling by auction. The first is that an auction brings certainty to the selling of a property where there is so much uncertainty when selling by private treaty. The second advantage to the seller is that there is no upper limit on bidding.

What control do I have with selling by auction?

As with every property you own it, it is your money so you decide on the price guide, the reserve and of course, whether or not to sell by auction. If however your expectations are too high we may recommend that you sell the property by private treaty. During the marketing we will advise you of the level of interest and whether or not the price guide needs to be altered but again that is your decision as is the setting of the reserve price which is done in the last week immediately before the auction. We would refer you though to our explanation note on Price Guides & Reserves below as there must be a link between them and rules do apply on the application of that link.

When it comes to the auction event then you the seller have very little control either over who buys or of the final sale price other than of course the property cannot be sold for less than your reserve (again see below). 

Price Guides

The guide price is given to assist buyers in deciding whether or not to pursue a purchase. It is usually, but not always, the provisional reserve range agreed between the seller and the auctioneer at the start of marketing. As reserves are not fixed until up to the day of auction, guide prices may be adjusted. Any changes in price guides, for whatever reason, will be posted on our website and in our auction room as an “addendum of sale”. Guide prices can be shown in the form of a minimum and maximum price range within which the reserve will fall or as a single price figure. Where a single price is quoted, the reserve will fall within 10% of the guide. The guide price is not the reserve price and both guide price and reserve price can be subject to change up to and including the day of auction.

Reserves

The reserve price is the seller’s minimum sale price at auction. It is the figure below which the auctioneer cannot sell. The reserve price is not disclosed and remains confidential between the seller and auctioneer. Both the guide price and reserve price can be subject to change up to and including the day of auction.

What types of property suit auction?

In essence any property can be suitable to be sold by auction but historically properties taken to auction have been vacant properties and have sometimes been known as ‘3D’ sales. What is meant by that is that they are sales due to Death, Divorce or Debt. We prefer the properties to be placed in our auctions to not have been previously marketed by private treaty so that they are fresh. Properties that have failed to sell by private treaty can be made suitable for sale via auction but it depends very much on how realistic sellers are on price guides and reserves.

Auctions are very good ways of selling where there has been a dispute, as properties are sold in a transparent way which may also suit executor sales. It is a very fair way of selling, where everybody has the same opportunity. The only buyers that cannot bid at an auction are those that do not have the cash ready and available or that they have to sell a property to raise the funds. Invariably, for these types of property, those are not the buyers that you may wish to seek anyway.

Properties with problems either structurally or legally are often sold by auction so that sellers are not involved in abortive costs where sales fall through as they do with private treaty.

Advantages of auction

• Immediacy - At the ‘fall of the hammer’ you will exchange contracts.
• Speed - From the time you commence marketing to exchange of contracts is only 6 weeks.
• Wider Marketing - Your property will receive maximum exposure to the market and inclusion on specialist auction websites.
• Confidence - Buyers have more confidence because they know that sellers are committed to selling and not likely to waste time. If buyers are more confident then that is good for you the seller!
• Decisive - Buyers are forced to make decisions and get organised.
• Competitive - Buyers bid in a competitive atmosphere.
• Certainty - The fall of the gavel is the point when automatic exchange of contracts takes place.
• Transparency - The best price is seen to be achieved thus satisfying all parties.
• Completion - This usually takes place 28 days from the date of auction.
• And finally....  Certainty is brought to what is otherwise an uncertain process.

Selling by auction – what happens?

• John Francis will carry out a valuation and either advise you or confirm that the property is suitable to be sold by auction.
• The price guide and expected reserve price will be discussed and agreed.
• We have preset dates for auctions and the best date and venue to sell your property will be agreed.
• The marketing campaign will be explained.
• You will need to sign our sole and auction agency agreements and pay an entry fee.
• After our agency agreements are signed we will instruct your solicitors to prepare a legal pack. This pack will be published on our auction website as soon as it is available and therefore the quicker that you instruct your solicitor the better.
• An Energy Performance Certificate (EPC) will need to be prepared (subject to exemptions) for the property and we can arrange that for you.
• Sales details will be prepared for your approval.
• Adverts will be placed, details circulated on mailing lists and viewings arranged.
• You will be kept informed of the interest levels in the property.
• You will be advised of offers that have been qualified. Unqualified or uncorroborated offers may not be put forward to you.
• You will be advised of our final recommendation for the reserve in the week prior to the auction having considered the level of interest shown during marketing.
• You will need to sign and return the final reserve figure by letter.
• When the property is sold the purchaser will pay a 10% deposit (minimum £2,000) made out to John Francis and completion will take place as set out at the auction usually 28 days thereafter.
• Completion will take place with your solicitors in the usual way.

Why Use a John Francis Auction ?

• Experience is invaluable in the sale of any property and particularly at auction. That is why no agent has sold as many properties as we have in Swansea & West Wales in any year this millennium!
• Our 20 residential offices working together provide an unique selling proposition.
• We regularly get feedback from both private and professional clients as well as solicitors to say that our auctions are the best organised and presented they attend.
• Property sold at our auctions have the widest range of marketing. All our properties are marketed with the latest technology so that all our offices work as one.
• You will be using an agent who is respected throughout the area by our professional colleagues.
• All viewings will be accompanied.

Please call us for more information or attend one of our auctions to see how they work.