Cash House Buyers vs Property Auctions: Which is Better?

When it comes to selling a property, there are several ways to do it. You can put it on the open market via an estate agent, sell your house at an auction or find a cash buyer. The latter can either be a private buyer or a company like Zapperty. 

Finding a cash house buyer or selling via auction both have a range of benefits, but also some drawbacks which need to be considered before deciding what’s right for you. In this blog post, we’ll compare cash house buyers vs property auctions, so you can make an informed decision.

Key Takeaways:

• Property auctions can be a great way to buy or sell a home quickly, with both buyers and sellers able to take advantage of favourable market conditions.
• Cash home buyers may offer less on your property but come with no hidden charges, a guaranteed quick sale, and less stress.
• There are pros and cons to both approaches, and your personal circumstances will determine which is the best choice for you.

The Advantages of Auctioning a House 

There are many reasons why people may auction a house instead of selling it via the open market. These include:

• Speed of sale: Because property auctions happen at a defined time and date, and the buyer needs to have the funds available, you’ll know when the sale is likely to happen – assuming it does sell. Even though there are steps to follow after the auction, these typically take just a few weeks.

• Finding niche buyers and investors: Properties that need renovating, make good investment opportunities or are otherwise quite niche tend to do well at property auctions because the right type of buyer is there. For example, if your home needs new wiring, is uninhabitable or has fire damage, an auction might be the best option.

• Competitive bidding environment and high prices: This relies on the right buyer(s) being in the crowd, but property auctions can drive up prices if there’s a bidding war. Likewise, properties sold at auction tend to achieve close to, or even sometimes above, market value.
• Transparency in the selling process: Buying a house at auction means that you have to pay what you bid. For sellers, this means that there’s no possibility of last-minute negotiations, hidden surprises or buyers pulling out. This gives you clarity and trust in the process.
• Reduced marketing costs: Auction houses usually take care of all the listings and marketing as part of their offering. This means you can essentially hand it over and let the property auction solicitors do the rest. If you’ve inherited or otherwise come into ownership and want to sell the home, an auction could be a great choice.

Understanding Property Auctions  

For those buying a house at auction, there’s a straightforward set of steps to follow:

1. Research relevant properties for auction in your area. The various auction houses will list their properties on their website or in a physical brochure, the guide price and the time/date of the auction.
2. View the property. Some property auctions will allow you to view the building beforehand, so check with the auction house.
3. Attend the auction. Property auctions are open to the public and you don’t need to register or pay to attend. If you bid and win you’ll need to pay the deposit on the day (usually 10%), an Administration Charge and a Buyer’s Premium. Your solicitor will handle the conveyancing process from there.

To learn more about the pros and cons of auctioning houses, read our blog Selling your house at Auction: Pros & Cons

Can you get a mortgage on an auction property?

Yes, you can use a mortgage to pay for an auction property but the key is preparation. As Savills explains: 

“Once the hammer falls you exchange contracts. You must have your mortgage in place and to hand before bidding on a property in order to adhere to the strict timescales and ensure you are able to complete the purchase within the given time limit.”

Cash House Buyers: A Viable Alternative  

An alternative to selling your house at auction is to use a cash house buyer. This can either be a private cash buyer or a company like ours. We make a cash offer within seven days on any property. It’s quick, hassle-free and reliable.

There are several advantages of selling to a cash house buyer: 

• Quick transactions: Because we use our own solicitors and have the funds on hand, we can typically complete a purchase within 1-2 weeks – usually within a week! If you’re looking to sell your house fast, there’s no quicker method.
• Reduced fees and commissions: Estate agents and property auction houses may charge to list and/or take a cut of the final sale price. We don’t. The offer we make is the amount you’ll get.
• Reliability: Auctions provide some reliability, but there is still no guarantee your property will sell. Our offers are guaranteed so once you accept, the deal WILL happen.

The main consideration when selling to a cash house buyer is that you won’t get full market value. Because cash buyers offer a quick sale with no fuss and no risk, offers are typically between 70-90%. However, because there are no additional fees and legal costs, you may find that the final amount you get from an auction is close to our offer – with a lot less stress!

Cash House Buyers vs Property Auctions: Making Your Choice

As a seller, property auctions have the potential to achieve a better purchase price for your home. But they come with risks and require you to be more involved in the process, with no guarantee of a sale. If your property is in bad condition or represents a good investment opportunity for a buyer, it could be a great choice.

However, if you want to sell your home quickly, with minimal hassle and no extra fees or charges, using a cash house buyer like Zapperty is an excellent alternative. You’ll receive slightly below market value, but for many people, the simplicity of the process is worth the lower price.

For more information, read our range of property blogs. And if you’re looking to sell your home fast, don’t hesitate to contact us.