Pros and Cons Of Buying Commercial Property At Auction

The property market is famously difficult at the best of times, but given the ongoing uncertainty surrounding the markets thanks to Brexit, it has been more volatile than usual recently. With fewer people able to get on the property ladder and many waiting to engage in the market until stability is reached – the fear of selling for negative equity has been quite high with a crash regularly being predicted – stagnation has become a real issue.

One way around that, perhaps, would be to engage in an auction. While they’re less popular than the traditional method of buying and selling, there are both positives and negatives to following the alternative route, as in the current climate you may be more likely to find a buyer and receive the kind of renumeration that you were hoping for – if not even more.

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What are the benefits of selling at auction?

Selling at auction tends to be a far quicker transaction than the more conventional route, as usually, the 10% deposit is required within a day of the accepted bid, and the remaining 90% balance should hit your account within a month. At their fastest, most sales that involve estate agents and conveyancers – as well as an ongoing chain and more than one set of third-party stakeholders – take 8-12 weeks, which is twice as long in its shortest form.

Should you find the right auction house – a nationally recognised brand like Allsop would be an excellent choice – they will make the sales side far more straightforward than an agent might. Geared toward getting the most money for your property as possible by using their extensive market knowledge and sales experience, there are countless cases where asking prices aren’t just met, but exceeded. Plus, in an auction environment, the chance for a bidding war is always present, so two or more interested parties could far exceed your asking price as a result, giving you an incredible return on investment.

Are there negatives to selling at auction?

There are some negatives present, too, with some potential buyers put off from bidding due to the auction setup, as they don’t enjoy the adversarial and competitive nature of that process. Also, while you have a reserve price in place, that could be lower than what you’re actually wanting to take home – but if it is matched, there’s nothing you can do to undo the sale. Far from cheap to do, either, auctioneers fees will be applicable, and you will need a solicitor present with you on the day, so their time will need paying for, too.

FG Editorial Team
The Founder's Guide Team - Asian Associates with dynamic elements out to make a change.Thank you for visiting our site! If you do have any questions or inquiry, feel free to contact us through our links and please don't forget to follow our social media accounts. It would be our pleasure to help you in any way we can. Always Remember: "Proceed to Succeed". Hoping to hear from you soon!

2 thoughts on “Pros and Cons Of Buying Commercial Property At Auction

  1. Sam Li Reply

    I love what you said about making straightforward sales. Buying commercial property should be done with an agent. I’ll be sure to find a reliable agent if I ever want to buy property for a business.

  2. Gary Fisher Reply

    I appreciate the efforts you have made to collect and share such useful information about the pros and cons associated with the purchase of commercial property at auction. In my point of view, an investor should not purchase a commercial property at auction as it has many financial difficulties including higher cost. So, an investor purchases a commercial property directly or through partnership. However, different types of risk factors associated with the real estate business should not be ignored.

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