Property auction
At a property auction, homes are sold to the highest bidder. In a traditional auction the sale is binding when the hammer falls.
A property auction is a way of selling homes, land and other property to the highest bidder. Auctions take place in a sale room, online, or both.
They are often used for homes that need work, repossessions, homes sold by executors and investment property. Sales can be quick, but buyers need to be ready before they bid.
Traditional auctions
In a traditional, or unconditional, auction, contracts are exchanged when the hammer falls or the online bidding closes. The winning bidder is legally bound to buy. They usually pay a 10% deposit straight away, and completion normally follows within about 28 days.
Because there is so little time, buyers usually have cash or a mortgage arranged in advance, and do their checks before the auction.
Conditional auctions
A conditional auction, often called the modern method of auction, gives the buyer longer. The winning bidder pays a non-refundable reservation fee, then usually has 28 days to exchange contracts and a further period to complete, often 28 days. The reservation fee is paid on top of the price.
Before bidding
Each lot has a guide price and a confidential reserve price, which is the lowest the seller will accept. The auctioneer publishes a legal pack with the title documents, searches and the special conditions of sale. Buyers are expected to read it, ideally with a conveyancer, before the auction.
Buyers may also want a home survey. There may be buyer's fees on top of the price, which are set out in the conditions.
Auction sales in the data
A home sold at auction is recorded in Price Paid Data like any other sale, at the price paid and on the completion date. A repossession sold by a lender is marked as an additional price paid entry. House Price Monitor counts these sales, because they are real sales at real prices.
Auction lots often need work, so their prices can sit below typical prices for the street. One auction sale can move a small street's figures, which is why we use the median.
| Traditional auction | Binding at the fall of the hammer; 10% deposit |
| Typical completion | About 28 days after a traditional auction |
| Conditional auction | Reservation fee; longer to exchange and complete |
| In Price Paid Data | Yes, at the price paid |
Related terms
Guide price · Repossession · Exchange of contracts · Completion · Additional price paid data · Median price