Selling your house at auction makes sense when a fixed timetable and a buyer who is committed early matter more to you than control over the final price. What you keep is the hammer price less the auctioneer’s entry fee and commission and your own legal costs, and a modern auction typically adds a reservation fee that the buyer pays on top of the price.
In short
- Under RICS’s standard conditions, a traditional auction binds the buyer when the hammer falls, with at least a 10% deposit.
- A modern auction commits the winning bidder to a reservation fee and agreement rather than to buying the property.
- One auction house publishes a 2.4% commission including VAT, a £1,800 minimum and a £360 entry fee for a residential lot.
- Our own view is that a property which fails to sell on the open market online is left with a lasting mark on its listing history.
- In Scotland a sale is binding once missives are concluded, and RICS’s standard auction sale conditions do not apply there.
Before you commit to an auction, get a free desktop valuation: send us the address and you will have an evidence-backed range within 24 hours.
How the two types of auction work
RICS’s professional standard for auctioneers says most auction sales are unconditional, and that there is a binding contract on the fall of the hammer.
RICS’s Common auction conditions, 5th edition, July 2024, set defaults an auctioneer can adopt. Each lot is usually subject to a reserve, and the conditions allow bids on the seller’s behalf up to, but not at, that reserve.
Traditional auction
A binding contract when the hammer falls, a deposit of at least 10% on the day, and completion 20 business days later under the RICS conditions unless another date is set.
Modern auction
The winning bidder pays a reservation fee and signs a reservation agreement. At iamsold, the reservation period is 56 days, counted from when the buyer’s solicitor receives the draft contract.
A modern auction, sometimes described in the industry as a conditional auction, works differently. iamsold, which runs this kind of auction and so has an interest in how it is described, says the winning bid obliges the buyer to pay a reservation fee and sign a reservation agreement, and does not bind them to buy the property. A buyer who does not go on to complete may lose the fee.
iamsold also says a traditional auction is usually not suitable for someone buying with a mortgage, and that the longer modern timetable gives buyers who need finance time to arrange it.
What comes off the hammer price
RICS’s standard says the auctioneer’s terms should set out precisely what you will owe, including if you withdraw before the auction or the property sells before or after it. The figures below are one auction house’s own prices, not a market rate.
Dee Atkinson & Harrison, which runs Auction House Hull and East Yorkshire, publishes these standard fees for a residential lot at a traditional auction:
| Fee | Amount, including VAT |
|---|---|
| Lot entry fee, paid upfront | £360 |
| EPC, if the property needs one, paid upfront | £100 |
| Commission when the property sells | 2.4% of the price |
| Minimum commission | £1,800 |
On a £200,000 sale at those rates, that is £4,800 in commission plus the £360 entry fee, £5,160 in total, before your own legal costs, plus £100 if the property needs an EPC. The auction house says the entry fee also covers a second auction if the first attempt does not sell, with terms applying. Its fee page carries no date, so check current figures with any auctioneer you approach.
Clive Emson, another auction house, says a seller also pays a solicitor to prepare the legal pack, and that the entry fee and legal costs are due even if the property does not sell. It also says the overall outlay is in many cases similar to using an estate agent.
The guide price: RICS recommends defining a published guide as the minimum the seller is prepared to accept at the date it is published, so the guide tells bidders roughly where your floor is.
On a modern auction the main fee moves to the buyer. iamsold says its reservation fee is paid in addition to the purchase price, is not paid to the seller, and is used to cover the auction, marketing and associated costs. In our view a buyer who budgets for the whole purchase has to find that fee as well as the price, so it is money that could otherwise have gone into the bid.
Who auction suits
The fair case for auction is speed and certainty. At a traditional auction the buyer is bound on the day, so there is no gap between accepting an offer and exchanging contracts in which the buyer can walk away.
That suits a seller whose deadline is worth more than the last part of the price, such as an estate that needs settling, a property that needs work, or anyone who needs a fixed completion date. It suits less well when the price matters more than the date, because the result depends on who bids on the day, and the auctioneer is authorised to sell once bidding reaches your reserve.
Whichever route an agent recommends, The Property Ombudsman’s Code of Practice for Residential Estate Agents, effective from 1 June 2019, says the potential benefits and disadvantages of any recommended method of sale must be explained in clear terms. Before you sign with an auctioneer, get these in writing:
- the entry fee, the commission and any minimum fee;
- what you owe if you withdraw, or if the property sells before or after the auction;
- the guide price and reserve they recommend, and the evidence behind them;
- whether it is a traditional or a modern auction, and what money is kept if the buyer does not complete.
An unsold lot and the off-market route
If bidding does not reach the reserve, the lot is not sold. RICS says the auctioneer should say so, and iamsold says the seller can then negotiate with interested bidders or continue marketing the property.
In our experience of introducing properties to investor buyers, a property that fails to sell on the open market online is left with a lasting mark on its listing history, and that makes the next attempt harder. That is BlackBook Investments’ own view rather than a published finding, and we have not found an official source that measures it.
It is why we point sellers towards an off-market sale, where the property is offered privately to buyers instead of through a public listing. The trade-off is real: a private sale reaches fewer buyers than an auction catalogue, so there is less open competition on the price.
Where we sit: BlackBook Investments introduces properties to investor buyers rather than buying with its own money, so we are on the broker side of this market and have an interest in which route you choose. We are a member of The Property Ombudsman.
Our guide to how much house buying companies offer covers the quick sale end of this market, and why a house is not selling covers problems worth fixing first.
Selling at auction in Scotland
Scotland has its own process. mygov.scot explains that the solicitors exchange letters called missives, and that the concluding missive is the binding contract between seller and buyer, rather than an exchange of contracts.
RICS says the sale conditions in its Common auction conditions do not apply to property in Scotland, so a Scottish auction runs on other terms. Ask the auctioneer and your solicitor exactly when you and the buyer become bound.
mygov.scot also says a house that is publicly for sale should have a Home Report, so ask your solicitor early whether one is needed for your sale. The Property Ombudsman’s code for estate agents in Scotland carries the same duty to explain the benefits and disadvantages of a recommended method of sale.
What this means if you are thinking of auction
Work out what you keep, not what the hammer says. Take the lowest price you would accept, subtract the entry fee, commission and legal costs, and ask what you owe if it does not sell.
If the price matters more than the date, compare that net figure with a private sale before you commit.
If you would like a second view first, get a free desktop valuation to set against the auction route: send us the address and you will have an evidence-backed range within 24 hours, yours whether you sell or not. If you then want to sell, we can introduce the property to matched buyers with verified funds, and nothing is marketed publicly without your say-so.