In the fast-paced landscape of property investment, strategic decision-making plays a pivotal role in maximising returns and minimising risk.

Such was the case with a former buy-to-let residential property situated in a sought-after Warwickshire town.

In this case study, we look at how a decision to leverage the auction process not only facilitated a swift and secure sale but also provided the seller with peace of mind amidst various challenges and uncertainties.

Property details and the challenge

The property had been bought as a buy-to-let investment and remained in the landlord’s portfolio for many years yielding an excellent return on the investment.

With the landlord retiring from the market, the decision to dispose of the property presented itself when the previous tenants served notice to vacate.

However, there were a number of challenges to contend with, not least, the property was in a poor state of repair and there were concerns raised by the agent over potential structural issues. In addition, as the tenants were leaving, the landlord had additional costs with mortgage payments, council tax and utilities to bear, without an income from rent.

Exploring options

As a firm, we presented three options to the landlord – either sell on the open market, attract a new tenant after remedial works were completed, or sell by public auction.

A sale on the open market risked a prolonged void period and the additional uncertainty over addressing structural concerns which could cause a prospective purchaser to withdraw from the sale.

Attracting a new tenant, while a viable option, did not align with the seller’s objective to retire from the market and incurred additional costs in completing remedial works to make the property ready for a new tenant.

A public auction offered speed and security in the transaction and was opted as the preferred route of sale.

Decision and execution

With the decision made to sell the property by public auction, a guide price of £200,000 was set and professional photography arranged for marketing. The property was listed six weeks before the auction, attracting significant interest with 16 viewings and multiple pre-auction offers. Despite these offers, the seller opted to bring the property into the auction, confident in the process and potential returns.

The outcome

The decision to sell by auction bore fruit, with the property ultimately selling for £255,000 after competitive bidding, surpassing the guide price and maximising returns for the seller.

Contracts exchanged at the fall of the auctioneers gavel and completion was achieved four weeks after the auction, underscoring the efficiency and speed of the auction process. Crucially, auction terms mitigated concerns over potential structural issues, providing the seller with peace of mind and security throughout the transaction.

Key takeaways

Several key insights emerge from this case study: auctions offer a fast and secure method of selling properties, particularly beneficial for motivated sellers seeking prompt disposal; competitive bidding can drive prices above initial expectations, maximising returns and ensuring a sale at the best price; cash buyers, or those buying with auction finance, and auction terms can alleviate concerns over property condition and security, providing sellers with confidence in the transaction process; and success in this sale led to the seller choosing the auction route for future property disposals, attesting to the efficacy and benefits of the auction process.

Conclusion

The success of this auction sale exemplifies the power of strategic decision-making and proactive execution in navigating the complexities of property disposal.

By embracing the auction process, the seller not only achieved their objectives of prompt disposal but also maximised returns and mitigated concerns over property condition and security.

This case study serves as a testament to the efficacy of auctions in delivering fast, secure, and successful sale processes, ultimately providing sellers with peace of mind and confidence in their investment decisions.