Selling a problem property at auction

The short leases, structural movement and non-standard construction that struggle to sell on the open market are precisely the property types that auctions deal with most effectively. The auction rooms are inhabited by cash-funded, experienced buyers who take account of the problems rather than abandoning them.

Why the auction room suits difficult stock

At the time when the hammer is dropped, the contracts are completed immediately, the buyer pays a 10% deposit and completion typically takes place within 28 days, as Zoopla's guide to buying at auction states. Following a poor survey there is no renegotiation and no last-minute reduction in price, a circumstance that is important since about a quarter of private treaty sales failed in 2025.

There is a cost attached to this certainty; auctioneers usually charge about 2.5% of the sale price together with any advertising expenses, which is more than most estate agents, and you have to pay a solicitor to put together the legal pack as well.

Short leases

A lease is considered to be short once it reaches about 80 years, since at present it costs more to extend below that limit: marriage value comes into play, which is equal to half the increase in the property's value resulting from the extension and which is paid to the freeholder, as the Leasehold Advisory Service has explained. Although legislation to get rid of marriage value has already been passed it has not yet come into effect, so the current market still takes it into account.

Since mainstream buyers require mortgages, lenders are hesitant about short leases, which is the reason why these flats perform better when faced with cash offers. Before proceeding, have your solicitor check if initiating the statutory lease extension before the sale would make your potential buyer base larger.

Structural issues and non-standard construction

Make sure that the legal pack contains all the information that you know, such as any engineer's report or damp report that you have commissioned. When auction buyers are assessing documented defects, they do so very carefully; for sellers, the problem caused by uncertainty is that a bidder who cannot judge the seriousness of a defect will assume the worst possible scenario. Generally, a quote for underpinning included in the pack is better than having a mysterious crack in the photographs.

The same effect can be achieved with non-conventional constructions such as precast concrete, steel-framed buildings, or certain types of timber frame. When listing the type of construction in the catalogue entry, it should be stated clearly since the kind of property that you are aiming to sell is something that buyers already understand.

Expect offers before auction day

A problem lot that is well promoted usually receives offers before the auction takes place. When a buyer urges you to sell early, this shows that they are interested, and the usual recommendation is to let them take part in the auction alongside all the other bidders rather than accept the advantage of a certain sale price. The early offer remains useful since it serves as evidence from the free market and can be used when you are fixing your reserve.

Pricing a problem lot

Your reserve is the lowest amount you are willing to accept, a figure that you agree with the auctioneer and keep confidential. The guide price is public and must be within 10% of the reserve; more information on how the two relate can be found in our separate article on guide prices and reserve prices at auction.

Do not price the lot as though the issue were non-existent. Properties that are problematic fail at auction when a reserve price is set at the level applicable to undamaged properties, and even if a lot is withdrawn you still have to pay the entry and advertising fees. With a flat worth £160,000, an auction fee of 2.5% amounts to £4,000; in contrast to a private sale which collapses twice every six months, the majority of sellers of problematic properties regard it as a good use of money.

The legal pack is the sale

People who are making serious bids will read over the pack before the day of the auction, and any gaps in it will cause the bids to be suppressed. You should instruct your conveyancer well in advance of the catalogue deadline and, before booking the property, compare the quotations from conveyancers who have experience of dealing with the tight schedules associated with auctions.