Selling a property at auction is no longer reserved for distressed sales, repossessions, or unusual properties. In recent years, auction has become an increasingly popular route for all types of UK sellers, from those who want the speed and certainty of a fixed completion date to those who believe competitive bidding will achieve a better price than a traditional private treaty sale.

If you are considering selling your property at auction, this guide explains how the process works, the several types of auctions available, what it costs, and how to decide whether auction is the right choice for your circumstances.

How Does Selling at Auction Work?

When you sell a property at auction in the UK, the property is marketed for a set period, typically three to four weeks, before being offered for sale to registered bidders on a specific auction day. Buyers bid competitively and the highest bid above the reserve price, which is the minimum price you are willing to accept, wins the property.

At the fall of the auctioneer's hammer, or the equivalent moment in an online auction, contracts are exchanged at once and the sale becomes legally binding. The winning bidder pays a deposit, usually 10% of the purchase price, on the day. Completion typically follows within 28 days for a traditional auction or 56 days for a modern method of auction.

This immediacy is one of the defining advantages of auction over a private treaty sale, where exchange of contracts can take weeks or months and either party can withdraw at any point before exchange. Once the hammer falls at auction, the sale is done.

Types of Auctions in the UK

Traditional Auction: contracts exchange at once at the fall of the hammer, completion follows within 28 days, a 10% deposit is paid on auction day, and the buyer pool is primarily cash buyers and experienced investors. This method is best suited to properties requiring speed and certainty or those that are unusual or distressed.

Modern Method of Auction: exchange takes place within 28 days of the auction and completion follows within 56 days, giving buyers more time to arrange finance. The buyer pays a reservation fee on auction day rather than a full deposit. This method attracts a wider buyer pool including mortgage buyers and is better suited to standard residential properties with broader appeal.

What Types of Property Sell Well at Auction?

Auction is not the right route for every property, but it works particularly well in the following circumstances:

• Properties that require modernisation or renovation, which appeal strongly to investor and developer buyers who are typically well represented at auction
• Unusual properties that are difficult to value accurately and may benefit from competitive bidding to establish the market price
• Properties with short leases, structural issues, or legal complications that would deter many buyers in a private treaty sale but can be bought by cash buyers at auction with full awareness of the issues
• Probate properties where a transparent, arm's length sale process provides reassurance to executors and beneficiaries
• Properties where the seller needs certainty of sale and a fixed completion date, such as sellers in financial difficulty or those who have already committed to a purchase elsewhere
• Properties in high demand areas where competitive bidding may push the price above what would be achieved through a conventional sale

What Does It Cost to Sell at Auction?

The costs of selling at auction vary depending on the auction house, the type of auction, and the sale price achieved. Sellers should be aware of the following potential costs:

• Entry fee: some auction houses charge an entry or listing fee of between £300 and £600 to include the property in their catalogue, payable regardless of whether the property sells
• Commission: most auction houses charge the seller a commission on the sale price, typically between 1.5% and 3% plus VAT, though this varies between providers
• Legal pack: sellers must provide a legal pack to prospective buyers before auction day, which includes the title documents, searches, and any relevant legal information. Solicitor fees for preparing this typically range from £500 to £1,500
• Marketing costs: some auction houses include marketing in their fees while others charge separately for catalogue listings, photography, and online promotion

It is important to obtain a full breakdown of costs from any auction house you are considering before committing to a sale. The total cost of selling at auction can be comparable to a traditional estate agent sale, particularly once legal fees are factored in, so it is worth exploring both routes carefully.

Setting the Reserve Price

The reserve price is the minimum price below which the auctioneer cannot sell the property. It is agreed confidentially between you and the auction house before the auction takes place and is not disclosed to bidders. The guide price, which is the figure advertised to attract interest, is typically set at or below the reserve price to generate competitive bidding.

Setting the reserve price correctly is one of the most important decisions in the auction process. A reserve that is set too high may result in the property not selling on the day, which can be damaging and leave you liable for the entry fee. A reserve that is set too low carries the risk of the property selling below your reserve figure if bidding fails to reach the level you hoped for.

An experienced auction house will advise you on an appropriate reserve price based on current market conditions, comparable sales, and the level of interest generated during the marketing period. It is worth taking this advice seriously, particularly if you are new to the auction process.

What Happens If the Property Does Not Sell?

If bidding fails to reach the reserve price, the property is said to be passed in or unsold. In this situation you are not obliged to sell, and the reserve price protects you from an unwanted sale at below your minimum. However, you may still be liable for the entry fee and any marketing costs incurred.

An unsold result at auction may sometimes affect the perception of the property among buyers in the wider market, as it may suggest the property failed to attract sufficient interest. For this reason, it is important to set a realistic reserve and ensure the property is well presented and properly marketed in the weeks leading up to auction day.

If the property does not sell at auction, you have the option to resist it at a subsequent auction, negotiate a sale privately with any interested parties who bid on the day, or bring the property to market through a conventional estate agent.

Auction vs Traditional Sale: Which Is Right for You?

The decision between auction and a private treaty sale depends on your priorities as a seller. If speed and certainty are your primary concerns, auction has a clear advantage. If achieving the highest possible price from the widest possible pool of buyers is your main objective, a well marketed private treaty sale may be more effective for a standard residential property in good condition.

Many sellers find that the transparency and competitive nature of the auction process give them confidence that the price achieved reflects true market demand. Others prefer the greater control and flexibility of a private treaty sale, where the process can be managed more carefully and buyers have more time to arrange finance and carry out due diligence.

It is worth speaking to both an auction house and a traditional or online estate agent before making a decision, so you can compare the likely outcomes, costs, and timescales for your specific property.

List Your Property with I Am The Agent

At I Am The Agent, we give UK sellers a fast, cost effective, and transparent alternative to the traditional high street estate agent, with listings on Rightmove and Zoopla and a fixed fee that saves you thousands in commission.

Whether you are weighing up auction against a private treaty sale or you have already decided that a traditional sale is right for you, our experienced team is here to help you achieve the best possible outcome.

Ready to get started? List your property with I Am The Agent today and take control of your sale from the very first step.