There are a number of reasons why selling your property at auction may be the best option:
1. It can provide a quick sale, with no risk of the buyer pulling out before exchange;
2. It can be suitable for properties needing refurbishment or redevelopment that may struggle to obtain their true value on the open market;
3. Properties can be sold with missing or limited information.
Auctions can therefore be the most efficient and effective method of sale for your property, but preparation is key. Here are our top tips to help you achieve the best result when selling your property at auction:
Research Your Auction House
Choosing the right auctioneer can make a significant difference. Make sure to consider their:
- Expertise – some auction houses focus on residential, while others specialise in commercial property. Choose one with proven experience in your property type.
- Past Performance – review previous auction catalogues and sales results. Did similar properties to yours achieve strong prices?
- Marketing Reach – a good auction house will promote your property to a wide pool of investors, developers and buyers, not just local contacts.
- Fees – whilst national auctioneers will give you exposure to a larger number of prospective buyers, they could charge a higher fee than a local auction house. Consider whether an auction house that targets prospective buyers locally might be more appropriate for the property you are hoping to sell.
2. Instructing Solicitors
Auction timelines are tight – contracts exchange on the fall of the hammer, so everything must be ready before the day.
Start early and instruct your solicitor as soon as you decide to sell. They will need time to prepare your auctions pack ahead of the auction date. Essential property searches will also usually need to be obtained before the auction date. Some search results may not be returned for six weeks or more and you will need to ensure the results are available for prospective buyers to view for at least a few days prior to the auction.
3. Collate Property Documents in Advance
A property with a more comprehensive legal pack is likely to attract better offers. Make sure to collate as much information and documents relevant to the property as possible. Getting ahead of time is key to avoid additional stress near the auction date.
Typical documents in an auction pack may include:
- EPC (Energy Performance Certificate)
- Asbestos Report
- Fire Risk Assessment
- Gas Safety Certificates and EICRs
- Latest Business Rates invoices
- Recent Utility Bills
- Building insurance policy and any other policies (e.g. indemnity insurance)
- VAT election details
- Notices served in respect of the property
- Details of any disputes
- Warranties or guarantees relating to works carried out
- Any searches or surveys already undertaken
- Details of any capital allowances already claimed at the property
And if the property is subject to occupational tenancies:
- Copies of leases, licences for works, rent deposit deeds, and other related agreements
- Details of rent deposits
- Service charge budgets/accounts
- Details of rent or service charge arrears
4. Present the Property Well
Even though auctions often sell properties “as is”, presentation still matters. It may be beneficial to:
- Clear away rubbish and tidy external areas;
- Ensure access for viewings; and
- Obtain professional photos and floorplans – some auctioneers will include this as part of their sale service
Summary
Selling your commercial property at auction can be a fast and effective route – but preparing ahead of time can ensure the process is straightforward and the price accurately reflects the value of the property.
BPE’s Commercial Property team have acted for both buyers and sellers of properties sold at auction for a number of years. Whether you are thinking of selling your first property at auction or you are experienced with auction sales, we are ready to assist with your journey. Please contact a member of the Commercial Property team at BPE if you would like to know more.
