Written by: Paul Parker on 13th October 2022
How do online property auctions work in the UK? You may already be familiar with physical auction rooms if you’ve bought or sold a property at auction before. The good news is, online property auctions are even easier! Whether you’re new to buying or selling a property at online auction or you’ve been through the process before, here we’ll explain how it all works
Online property auctions make it possible to view, make bids and buy properties from the comfort of your own home. As long as you have a laptop, tablet or mobile (and a stable internet connection!) you no longer need to visit an auction room to purchase your next home or investment. You’ll still benefit from the transparency and speed of the in-person auction experience, but in real time through your device screen, instead.
Unconditional auctions see contracts exchanged as soon as the virtual hammer falls, once the auction ends. Provided the reserve price has been met or exceeded, the winning bidder is legally obligated to purchase the property. After this, there’s a limited time to complete the sale, which is typically within 28 days. Conditional auctions work slightly differently. Conditional auctions give the buyer a longer time frame before contracts are exchanged, usually 20 days. During this time, buyers have exclusivity of the sale and can carry out their due diligence, engage with solicitors, and secure finance for a mortgage if necessary. After this period, the buyer has a further 20 days to complete the sale.
One of the biggest benefits of online property auctions, particularly if you're a buyer, is the transparency the process offers. When you buy a property through a private treaty, you put forward an offer to the seller's estate agent, who will relay it back to their client. You'll be informed if someone else offers more, but the numbers remain private. You probably won't be aware how many other buyers are interested in the property, either. However, when you bid on a property during an online auction, you can watch other bids being put forward, in real time. You'll know exactly how many other buyers are bidding, and how much money they're offering. The transparency of the online auction process assures you you're paying in line with what other people think the property is worth.
Buying or selling a property can be a lengthy process. It can take months for a sale to complete through a private treaty, but online property auctions are the perfect option if you need to secure your sale or purchase quicker.
Legal packs are drawn up and due diligence is carried out before an auction takes place. This doesn't happen until after the seller accepts an offer under a private treaty sale. Buyers and sellers must wait much longer - potentially for numerous months - until a sale can complete privately.
But at auction, contracts are exchanged upon the fall of the virtual gavel, and the winning bidder is legally obligated to buy the property as soon as the auction ends. The property's sale typically takes just 28 days to complete.
Thinking of selling a property at auction? Request your free appraisal today.
Buying or selling a property at online auction protects you from one of the biggest private sale risks: withdrawals. In the current economic climate, almost a third of property sales through estate agencies are collapsing - the fastest rate since the Covid-19 pandemic began. Sale collapses happen for many reasons, and can be instigated by either buyers or sellers. Commonly, either party withdraws from the sale simply due to a change of heart. But online property auctions offer a safety net against collapsing sales, for both buyers and sellers.
When you sell a property at auction, as long as the reserve price is met or exceeded, you can be certain your property has legally sold when the bidding ends. You won't have to undergo any further negotiations, or worry about buyers withdrawing from the sale before completion.
If you're buying a property at auction, there's no risk of any unexpected surprises during a survey after you place your winning bid. Not only can you view your chosen property before the auction begins, but you're also provided with a legal pack. Everything you need to know is supplied beforehand, so you can make a fully-informed decision to purchase. There's also no risk of the seller accepting a higher offer from a competing buyer at a later stage, known as 'gazumping.
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Online property auctions are a fast, simple and secure way to buy or sell your next home or property investment. With greater flexibility, and without the risk of gazumping, ongoing negotiations or withdrawals, online auctions offer more security for both sellers and buyers.
If you’re wondering whether an online property auction is the right option for you, call us today on 0345 505 1200 and our team will be happy to help.
Written by: Paul Parker on 13th October 2022