If you’re planning to use an auction house, you’ll naturally want to feel assured that the house will sell. After all, many people opt to auction property because they are working to a schedule that necessitates the quick sale of their house.

However, there is a possibility that no one will bid.  Other times, bids fail to reach the pre-agreed property auction reserve price.   This is the minimum amount for which the auctioneer can sell the property (and the seller is willing to accept).

This situation can happen, for example, as a result of poor preparation prior to the auction.

So – what happens if this scenario comes to pass?

In this article, we explain the process that is usually followed if no one bids on an auction property – and what you can do if it happens to you.

What Happens if a Property Doesn’t Sell at Auction?

UK auctioneers withdraw properties if there are no bids.  Similarly, if the bidding fails to reach the reserve price over the auction period, the same scenario will occur.

At this point, the owner of the property is under no obligation to sell it.

However, most sellers are looking for a solution and do not want to go through the process of putting the house up for auction all over again.

Read on for some alternative options.

How to Sell a Property at Auction that Hasn’t Met the Reserve

Post-Auction Deals

Both traditional and online auctions enable “unsuccessful” sellers to make deals with potential buyers even after bidding has ended. 

It’s best to arrange this soon after the bidding for your property ends.  Many auction houses publish the reserve price of unsold property on their websites or elsewhere in the following hours or days.  They will also contact auction bidders and others that expressed interest during the marketing period.

This will make it less likely for you to achieve a good price for your property, as everyone will be able to see the very lowest bid you’ll accept.

However, it may be that numerous properties failed to sell at a particular auction. If this is the case, the auction house may decide to relist them all for a smaller-scale auction.  Similarly, unsold online lots can get relisted with a shorter timeframe (as there’s no need to market the property again).

Relist with a Lower Reserve

An unsold property may be an indicator of an overly-ambitious asking price. 

Assuming there are no satisfactory post-auction bids, the auctioneer may suggest dropping both the reserve and guide prices prior to the relaunch.  How much would depend on previous buyer appetite, market conditions and whether certain factors have come into play during the initial auction that have affected the perceived value.

Note that, with traditional auctions, there may be a delay to relist as sellers may have to wait for the next catalogue release.  This usually takes between 1 and 2 months.  However, where possible, the auctioneer may suggest an online auction sale.

Negotiate Privately with Potential Sellers

If you haven’t managed to sell your property at auction, it may be worth considering the classic “private treaty” route. 

This is akin to the way houses are sold via estate agents.  The property is listed for sale, buyers express their interest and a price is negotiated without any pre-specified sale date.

How to Sell a Property at Auction that Hasn’t Met the Reserve

How to Increase the Likelihood of a Sale at Auction

Thoroughly Research Your Home’s Value

A poorly estimated guide price is one of the main reasons why a property may fail to sell at auction. Bidders can be very savvy, and many will easily be able to see the seller is demanding an amount that is way above fair market value.

Research the market, particularly when it comes to similar property in the local area. You can check out property websites to discover what the most recent sale prices were in your neighbourhood – or, of course, you might decide to arrange a professional valuation.

If in doubt, you can always ask the auctioneer’s advice. They are used to consulting on reserve or guide prices and will know what is likely to sell and what isn’t.

Resolve Current Problems

When selling at auction, there will be a property contract that is visible to potential buyers before they bid – plus, they may decide to arrange a building report. 

You shouldn’t try to hide structural, maintenance or legal issues from bidders, but even if you do, there are numerous means by which they can be discovered anyway. Problems with the property may dissuade people from bidding – or push the average bid way down.

Because of this, it may be worth your while to fix these problems where possible before going to auction.

Use an Established Auction House

An experienced auctioneer that has a history of successfully selling property like yours. Try to find one that is local to you – or has sold property in your neighbourhood before – as they are more likely to attract the right buyers.

For example, if you’re looking for auction houses in London, it may be best to try and find one in your specific borough – unless a city-wide business has a better reputation and track record.

Alternatively, using an online auctioneer like Property Solvers.  We have over 20 years of fast sales experience.

How to Increase the Likelihood of a Sale at Auction

Properly Promote Your Property

The auction house should actively share information about your property via the right avenues, but there’s a great deal you can do to help it along. For example, posting about it to friends on social media or including it on listings can help more people to see it.

It’s also important to open the house up for viewings where possible.  Remember also to present it in the best possible condition when potential buyers come to visit. The more attractive you can make your house, the more likely it is to command high bids.

Be Open to Deals

Of course, many people will ask “why sell my property at auction for a reduced amount?”. It can be frustrating to have to consider missing out on your intended price, but if your property fails to sell, you’ll need to weigh up your priorities.

If you need to get the house sold as soon as possible, an after-hours arrangement between yourself, the auctioneer and a potential buyer may be your best recourse – particularly if you’re going to lose money by keeping hold of the property for much longer.

Chat to Property Solvers

If you need to sell your property fast, you can make contact with a fast home buying company like Property Solvers.

As auctioneers and quick house sale specialists for almost 20 years, we’d be happy to run through your options. No obligation, of course.