Buying and selling property takes too long in Britain. The TV presenter Kirstie Allsopp (Location, Location, Location) agrees. She vented recently on Radio 4’s consumer programme You and Yours about how delayed property transactions are. Many solicitors are still blaming Covid for the lag, she says, even though they are using the latest technology that should speed up transactions.
This problem, which affects families, solicitors, local authorities, developers and all aspiring homeowners, isn’t going away soon (says Nick Kalms, a property auction expert). But think about how much less fuss it would be and how much time could be saved if the auction house was considered the first place to sell a property, instead of a last resort.
While auctions are not a suitable way to sell every property, they should be considered for a far wider range of sales. In our experience the reserve price is often exceeded at auction, and you also cut down on the uncertainty — and the long delays — of selling in the traditional way.
Typically, an estate agent can take up to 26 weeks to sell a property, whereas auctions bring this down to about six to nine weeks, including marketing periods — this has been my experience having handled almost one thousand properties in the past 20 years. Auctions are still seen as a last resort used to sell a property on the cheap, but this way of selling oIers transparency, speed and a degree of certainty. When it comes to development land, for example, an auction enables a plot to be seen by as wide an audience as possible, and this creates a competitive marketplace for bidding. Auctions also bypass the infuriating lack of certainty, often until the last second, that every homeowner faces with traditional transactions.
I know a lot about the type of properties that go to auction as I’ve worked in this space for 20 years. I can tell you that while some of the homes I’ve seen wouldn’t naturally be shown in an estate agent’s window, many of them have simply lost value from sitting on the market for too long.
Sure, some are in poor condition, with damp problems, structural issues, in receivership, or in desperate need of modernisation because they have been rented out for a long time. In more cases than you’d imagine, many of them are owner-damaged.
The majority of these problem properties, however, have been stuck in purgatorial probate. They have been sitting empty for years, often blighting neighbourhoods with their overgrown gardens and sorry façades.
When it comes to a problem or probate property, a typical scenario will involve a solicitor instructing a local agent who then values the property too high. These properties stay on the market for longer than they should, then the price is reduced to get it moving. After about six months of languishing on the market, the seller sells at a discounted price to a property trader who will sell it at auction within four weeks for a profit
The industry’s embrace of change is too slow to make any meaningful difference. Our business, which for 15 years has brought former problem properties back into use, would be non-existent if we had to wait for estate agents to sell them.
I’m not knocking estate agents, who play an invaluable role in selling homes in good condition — we need to address the problems with English property law that allow gazumping and fragile sale chains to exist. About one in three deals fall through, dashing the hopes and dreams of homeowners.
The auction house should be used to buy and sell many more properties, especially for buyers who want to sell quickly with minimal fuss. An auction is often considered the last resort but, I believe, in many instances it should be the first.
Nick Kalms is co-founder of Probate.Auction and Resi.Auction, property auction platforms, and YouSpotProperty, which provides gift cards for identifying empty or derelict properties.
