When you’re ready to sell houses or flats in your portfolio, you may be considering selling through an estate agent or at auction.
Both approaches have their pros and cons depending on your particular circumstances, so what’s best for someone else might not be best for you.
When it comes to making the first step, consider exactly what you are looking to achieve. Are you looking for a maximum price? Is there a tight deadline? Is simplicity most important? Weighing up the pros and cons beforehand may help you sell your house fast as well as satisfying your other requirements.
Pros and cons of selling by auction
Perhaps the greatest benefit of selling your property by auction is that you’ll be given a specific date for the auction, meaning you should have near-certainty on the date your home will sell. This can be very helpful if you are looking to sell in a hurry and by a specific deadline.
Another perk is that the auctioneer will take care of listing and marketing the home to generate interest in, and a skilled auctioneer could drum up a lot of potential buyers.
Sales done through auction also tend to be definite, as very few final bids fail to convert to payment and exchange of contracts, again providing some vital certainty.
You might also be able to make a decent profit on your home if it generates competitive bidding where several buyers try to outbid each other for it.
However, auctioning your house or flat also poses the risk that you will not get any bids beyond the minimum reserve opening bid. And auctioneers will often persuade you to set the reserve bid at a price lower than you might actually be willing to accept, because their hope is that such a low price will attract plenty of interested buyers. The gamble is that if only one person bids at auction, you’ll have to accept the minimum bid and might make a loss on your home.
Another negative factor about auctions is the cost of the various fees involved. Not only will you have to pay legal fees to your solicitor to put together a necessary pack of information about your home, you’ll also have to pay the auctioneer fees for listing and selling the property. All of these costs can add up to a large amount, making auction perhaps not the best option for those homeowners who are hoping to retain all of the money from selling their property.
Pros and cons of selling through an estate agent
Many homeowners are familiar with the traditional option of selling through an estate agent. You’ll give the estate agent an instruction to sell, and then they will take care of preparing the listing for the property, marketing it, and organising viewings for prospective buyers. This takes all the burden off the homeowner from having to do any of that work.
But there are several cons about selling through an estate agent, including the fact that unlike an auction there’s no guarantee of when you might actually sell your house or flat. There’s no deadline for buying houses that estate agents have put on the market, and some homes remain unsold for weeks, months, and even years after their initial listing. If you are looking to sell quickly, an estate agent is not going to be the best choice.
Another drawback of selling with an estate agent compared to an auction is that sales done this way are notorious for falling through. Even after you get an offer from a buyer to sell your home, there is no certainty that the sale will actually happen until contracts are signed and exchanged. The rate of sales that fail sometime between the initial offer and final signing date is said to be fairly high. As a result, if you’re looking for a selling process that has some stability, you might want to consider an auction or even selling to a property buying company.
When you sell through an estate agent, you’re also never ensured that you’ll get the asking price that you want to get for your house or flat. Even with an estate agent on your side marketing your home, you might never get an offer at the price you want. And if you are in a hurry to sell because of financial or other needs, you might end up having to accept a lower price offer from a buyer because you don’t know when, or if, you could get a better offer.
You’ll also have to pay estate agents fees for selling your home, which can make a further cut to the total amount of money that you’ll receive for selling this way.
Property buyers are a viable alternative
After weighing the pros and cons of selling either by auction or estate agent, you might feel that neither approach is ideal for your situation. Thankfully, there is a viable alternative – selling your house or flat to a reputable property buying company. These businesses, like the long-running LDN Properties, make fast offers to buy homes without charging any fees.
There are several pros to selling through this approach, not least the fact that it’s better for your finances as you generally get competitive offers for selling and you won’t lose any of the sale value in fees. Property buying companies are also typically eager to make speedy purchases, so you could also sell your house much faster than through the other options.