Property Auctions Explained
What are property auctions?
Property auctions are an event whereby an auctioneer gets together a load of interested people looking to buy property in a central location, and offers property for sale. These properties are probably being listed in a catalogue, people who are interested in buying it will bid at auction for the properties against one another, and the last person to make a bid will end up buying that property as long as it's over the reserve limit, as long as it's over the reserve limit.
What types of auctions are there?
There are two main types of auctions. There are commercial auctions and residential auctions. At commercial auctions, you'll find shops, offices and industrial lots being offered. And at the residential, as the name implies, you'll see flats and houses being offered for sale. From a size point of view, the size is the number of lots offered at each sale, and they vary. Some are just single lot sales, where you might see a single lot being sold, or a single flat in the region. Some of the larger London auctioneers and the regional auctioneers however, offer up to 3 or 4 lots in one day at a central location in the middle of a city, and they might raise anything up to 8 million pounds on that day.
What does an auctioneer do?
The auctioneer has many roles. Firstly, he will be putting a catalog together, going out to see potential clients saying 'would you like to sell you property via our auction?' . He'll be responsible for overseeing the production of the catalog, making sure it's properly marketed to a wide audience, and on the day he'll be the person who stands up in front of the, the crowd of people who've potentially come to buy property and, and invite bids from the audience and regulate the sale, and hopefully knock the hammer down to sell properties on behalf of his clients or vendors.
How much do auction houses charge?
Auction houses have two parts to their fee structure when they're asked to sell a house for a client. One would be the catalogue entry fee, which typically will be from 175 pounds up to maybe 500 pounds if you take the full page in the catalogue. And then if they are successful in selling the property, you'll be paying a percentage commission, which will be similar to what an estate agent will charge. Though, obviously, if you sell a lot of properties through auction you're able to negotiate the price down to maybe half a percent. But the normal charge would be about 2-2 1/2% plus VAT.
How can I find out when an auction is taking place?
To find out when an auction is taking place can be quite a daunting task. There's over two hundred eighty auctioneers in the U.K., and between them they offer an excess of twelve hundred auctions every year. We, at the Essential Information Group, have details on all these auctions on our online sites, so you can look and see what auctions are happening in your area. If not, ask local estate agents, they may well know the actual auctioneers in the area and, when you find your auction house, of course, you can go on their mailing list to receive the catalog, or their Emailing list, and you'll get notification when their catalog is coming out, because all auctioneers now put their catalog on the Internet.
