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Search forGo under the hammer to beat housing slump
Monday, August 18, 2008, 09:00
They both work in IT, but John's banking job recently shifted from Reading to South Wales and a house move was vital.
"We weren't looking forward to it at all,'' says John.
"The housing market being what it is at the moment, we were dreading the thought of selling our home.
"Then a friend suggested an auction. We were wary at first. But it seemed to make good economic sense.
"Our four-bedroom house had a guide price of £260,000. In the end, it actually went for £6,000 more. We were delighted.''
As prices fall, it is one way to get your property moving.
Chris Hope, a partner in Swansea's Dawsons Estate Agents who has been in the industry for more than 30 years, says there was a time when an auction was considered to be the "dumping ground" of home sales.
But during the past 15 years or so, that has changed. Today, he insists, it is a good way to sell both properly marketed land and property, particularly if it is put to auction from the outset and not "tested" beforehand.
So it can, and does, work. Although it is not for all sellers or their homes.
Mr Hope added: "The majority of our properties that are entered for auction are either in a very poor state of repair — and therefore worth more to one purchaser than another — or have some form of unique aspect, be it a view, several acres of garden or a popular location.''
Land also sells well at auction as individual and multi-building plots are difficult to find.
"Most importantly, any auction's success is a seriously motivated seller who is clear about selling.
"The auction will provide the highest price that the open market will pay at that time.''
It's all heady stuff. But as a way of selling your home, it can be quick and decisive as the number of unsold homes rises.
Best of all, it is final. Once the auctioneer's hammer comes down, that is it. There is no going back.
There is no last minute pulling out and no trying to offer below the agreed price at the last-minute.
Latest Land Registry figures show the number of property transactions has fallen by as much as 70 per cent in the past year in some parts of the UK.
In June 2007, there were just over 105,000 house sales nationwide. That had fallen to 17,681 by the same month this year.
Swansea has fared a little better, with a 30 per cent fall being seen as nearer the mark here.
But it is still enough to make a seller's life more troublesome.
So the once-simple art of selling your home is now becoming more and more complex as vendors try all sorts of ways to make their homes stand out from the pack.
The Stewarts, who moved from Reading to their new three-bedroom house in Bishopston in July, say the auction was nail-biting but worth it.
"If the truth be told, our property needed a bit of work, but its position with views of the countryside was fantastic. I think that is what sold it at the end of the day,'' says John, who now works for a bank on the city's enterprise zone
"It was a one-off.''
"We were actually prepared to let it go for a bit less than the guide price just to make sure it went.
"But in the end, there were two people who really wanted it and it went for more than we expected.
"We were very happy.''
Dawson's most recent public auction saw 21 properties or parcels of land go up for sale in Swansea. Between them they had been expected to fetch just over £1.7 million.
They actually went for just under £2.1 million.
One property in Newton Road, Mumbles, that had a guide price of £285,000, went for £390.000
Not bad in a tough market.
Mr Hope says it is not all clear water when it comes to selling under the hammer.
Auctions simply aren't suitable for an average three-bedroom family semi.
It more usually has to be something either different from the norm or in need of work.
"Of course,'' he adds, "an auction is as affected by supply and demand as anywhere else.
"And we would also recommend to individual sellers that if there are too many of a similar property or land placed in the same auction, then that will lessen the chance of success and we would recommend that the most suitable property be delayed until the following auction.
"But one big advantage to both seller and buyer is that on the auction day, contracts are formally exchanged with an acceptable deposit and full payment made within 28 days thereafter.
"It provides a very clean and much quicker property transaction than the current property market.''
For their part, the Stewarts say it is a sales method they would use again.
"People will buy the best house they can in the price bracket they're looking at,'' they add.
"This is one way of doing it.
"It might not be for everyone, but it certainly did the job for us.''
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