The property market has been facing a challenging time in the past few years, with longer time-to-sell, falling prices, and increasing costs associated with fall-throughs. However, there’s one aspect of the market that has remained resilient and continues to provide a fast and secure way of selling properties: online auctions.

Here are some of the benefits of the online auction process in the current property market:

Faster Process with Contractual Timescales

In today’s challenging property market, selling a property quickly has become increasingly difficult. Recent data shows that the average home sold in March took 22 days longer to sell compared to the same period last year. Additionally, it’s worth noting that nearly 40% of the homes that were sold last month had been listed on the market in 2022, which underscores the challenges of achieving a speedy sale.

Homes that sell quickly are more likely to achieve their asking price, February saw the number of properties sold following a price reduction peak at 50%, making it even more important for sellers to consider faster, alternative methods such as auctions.

The Traditional Method of Auction, for example, is the most common form of online property auction that guarantees a sale exchange immediately and completion within just 28 days. Compared to the traditional private treaty method, which can take months to complete, the auction process is much faster, providing a reliable option for those looking to sell their property quickly.

Reduced fall-throughs

In Q4 2022, there was a 16.9% increase in property sale fall throughs compared to the previous year, and the average cost went up by 11.4%. The cost of a property fall through now stands at an average of £3,311. However, auction provides ways to mitigate the risk of a buyer pulling out of a sale.

The Auction process provides the legal information upfront in the form of an auction legal pack, so potential buyers are given greater transparency. When an auction is won, or a pre-auction offer is accepted, the buyer pays the auction fees immediately. This financial commitment from the buyer is the leading factor behind why online auctions have a completion rate of over 95%.

Competitive pricing

The property market is at its weakest since 2019 as house price growth slowed to 1.6% in March. The average UK home now sells for £257,122, whereas in august of last year it was £273,751, a drop of 6% and a decrease of £16,629. Properties currently on the market are having to cut prices in order to find a sale, 45% of homes listed on Zoopla had their asking price drop at least once in February.

The marketing a property for auction works slightly differently. Sellers will set a reserve price for the auction which represents the minimum price that the property can sell for at the live auction event. The property will then be marketed with a guide price, which will be within 10% of the seller’s reserve price. This pricing strategy attracts more interest in potential buyers and the auction process thrives on the competition of buyers to drive the price up.

Increased interest from buyers

With fewer homes coming onto the market in recent years, and more buyers registering to buy, bidding wars do still remain common. Data shows that 32% of homes sold in Great Britain in March had three or more offers from competing buyers. Online auctions are a great way to capitalize on this increased interest from buyers and provide a platform for sellers to achieve the best price for their property.

Overall, online property auctions remain a powerful tool for selling properties quickly, securely and efficiently in today’s market, providing a fast, secure, and competitive way of selling properties. With longer time-to-sell, falling prices, and increasing costs associated with fall-throughs, online auctions provide a welcome alternative to the traditional private treaty method.