"As a way of selling your property, [an auction] beats any other method hands down in terms of excitement," say Cherry Maslen and Lucy Denyer in The Sunday Times. Of course, excitement may be the last thing you want when selling a house but with the market drying up, it is one of the few ways left more or less to guarantee a quick sale. One benefit of auctions is that once a house has been won, the sales rarely fall through. Buyers must have finance in place before they can bid, and have to put down a 10% deposit on the day, which they will lose if they pull out of the deal.
Selling a property at auction isn't all good news for vendors, of course. There's a reason why, in more normal circumstances, the only properties sold at auction are either repossessions or those needing serious renovation. The average buyer at auction is a serious bargain-hunter, so you must "be realistic about the price you can expect to achieve", warns Jo Thornhill in The Mail on Sunday. But with property prices dropping fast, a quick, low-ball sale at an auction could still get you the same price as you'd get, or more than you would have got, after six months on the open market.
If you do decide to auction your property, first research which auction house to use. Fees are usually around 2%-2.5% of the sale price, plus between £200-£400 to have a listing in the auction catalogue, but these vary, so shop around. And while selling your house by auction is quick, it isn't lightning fast. It takes about six weeks to get your house into an auction, as the auctioneer needs four weeks to put your details in its brochure. While you wait, consult a lawyer, as you will need to put together a legal pack, including house deeds, local searches and any leasehold information. These cost around £500.
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Finally, pay attention to the auction house's advice on setting a reserve price they know what they are talking about. "If you push to have a higher reserve price than recommended, the auction house may load its fees so you will end up paying more in commission," warns Thornhill. And after all, you don't want to go to all the trouble only to find that your house doesn't sell on the day because the reserve was too high.
A week in the property market
Estate agent Douglas & Gordon reported that the number of properties to let on its books was 90% higher at the end of July 2008 than at the same time last year. The agency said that as a result of this rising supply, rental growth has stalled in Central London.
Halifax reported that house prices dropped by 1.7% in July, taking the annual drop down to 8.8%. According to their index, the average house price is now £177,351.
The average number of property sales has slumped to a 40-year low, according to the Royal Institution of Chartered Surveyors, with an average of 14.4 sales handled by surveyors in the past three months that's about one a week. However, the number of surveyors reporting falling house prices was slightly lower than in previous months, at 83.9%, down from a peak of 94.7% in April.
Fly-to-let and holiday-home owners are facing problems as tough conditions lead several budget airlines to scrap flights to many destinations. Ryanair has cancelled its flights to Basel, Budapest, Palma and Valencia, while British Airways has scrapped six short-haul services and EasyJet has scaled back its flights to Spain and central Europe. Homeowners are "anxiously awaiting the publication of winter 2008 and spring 2009 timetables," says Emma Wells in The Sunday Times.
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