Real estate auctions on the rise – Five common properties…

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With so many benefits, including lower failure rates and faster sales, it’s no surprise that selling a property at auction continues to grow in popularity. Recent research highlights that as 2022 progresses, the number of properties sold month-on-month continues to rise, with an impressive £480m raised at auction in May 2022. an increase of 24% compared to the total amount raised in May 2021.


In May, residential auction sales increased by 17%, showing that more and more people are choosing to buy and sell at auction. Despite this significant adoption, there are still many common misconceptions about buying and selling at auction. Here I set the record straight with my top five auction myth busters:


Goods sell for less at auction



Perhaps one of the biggest misconceptions is that a property sold at auction costs less than a property sold through a private sale. More often than not, it is the opposite, with many properties selling for more at auction than they would have had they been sold privately. With the transparency of the sale and the ability to see where the auction is at in real time, the competitive nature of an auction often drives up the sale price.


This year at My Auction, properties sold for an average of 21% above asking price, with the best performing lot selling for 19% above the highest realtor valuation.


Real estate auctions are for problematic properties that cannot be sold normally


Many people are under the impression that real estate auctions are only for properties that have problems or need major renovations. This outdated misconception is far from the truth with many gorgeous homes listed that are in pristine condition and ready to move into straight away. And it’s not just properties that are being auctioned off, land suitable for development is also being sold.


Real estate auctions are for those desperate to sell


Many owners choose to auction to take advantage of the benefits, including sale certainty, faster turnaround times, and transparency. Auction swap deal when the hammer falls, ending within four weeks, compared to 18 weeks in the case of over-the-counter sales. Another benefit of auctions is the ability to generate a sale well above the asking price.


In the same vein as auctions of luxury goods such as art, jewelry, and cars, real estate auctions can often yield the best financial results, as the market decides how much each property is worth to them. , not the auctioneer or realtor.


Real estate auctions are for cash buyers only


A lot of people are under the impression that unless they’re a cash buyer, they can’t buy a property at auction. This is an error. If the property you are buying is mortgageable, buying at auction with a mortgage is possible, including for first-time buyers, which is another misconception. Over the past 12 months, My Auction has seen a 50% increase in first-time buyers through auctions.


Real estate auctions are risky because you can’t see the property


Before a property is put up for auction, there is a marketing period which will give interested parties the opportunity to view the property to determine if it is something they would like to bid on. My Auction partners with local real estate agents to offer potential bidders the opportunity to view the property and ask questions. With auction purchases, you also get the added level of security that comes with the legal pack visible before the auction. This means full transparency of what you are buying before bidding, a benefit you don’t get with private treaty sales.


Over the past 12 months we have seen a significant increase in lots offered as well as potential buyers interested in auctions, which is increasing every month. Buying and selling at auction provides both parties with much more security and certainty of achieving a sale, which is invaluable in today’s market where inventory is low and demand is high. Real estate auctions are a truly viable way to buy and sell all types of property and land. Over the past few years, we have seen a noticeable shift in our buyer demographics.


Auctions are not just for investment buyers, we are seeing unprecedented interest from first time buyers, second time buyers, those looking for a forever home as well as those looking for something with development potential , all of whom are beginning to see the benefits of auctions.


*Stuart Collar-Brown is co-founder and director of online real estate auction house My Auction


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