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Property for sale by Auction A diverse group of people is seated at a table, with a serious-looking man holding dollar bills in the foreground. He is dressed in formal attire and wears a kufi hat. A gavel is present on the table, suggesting a legal or negotiation setting. Presented by World of Auctions

Investment Buyers – Making Below Guide Price Offers at Auction While Awaiting Better Cash Liquidity

Investment Buyers – Making Below Guide Price Offers at Auction While Awaiting Better Cash Liquidity

The world of real estate is buzzing with a new wave of excitement. The tide has turned, and a massive influx of brand new buyers and sellers are ready to use auction as their preferred method of sale.

This shift is not just a ripple in the water, but a tsunami of change that is reshaping the landscape of property investment.

Investment buyers, traditionally seen as the sharks of the property world, are now finding themselves swimming in a sea of opportunity. With a surge of new participants in the auction market, these seasoned investors are adapting their strategies to capitalize on this trend. One such strategy is making below guide price offers at auction while awaiting better cash liquidity.

This approach may seem counterintuitive at first. After all, isn’t the whole point of an auction to drive up the price? But let’s dive deeper into this strategy. By making below guide price offers, investment buyers are essentially placing a bet on the future. They’re banking on the fact that their cash liquidity will improve in the near future, allowing them to secure properties at a lower cost today.

This strategy is not without its risks. There’s always the chance that cash liquidity won’t improve as expected, leaving these buyers in a tight spot. But for those who can afford to take the risk, the potential rewards are significant.

The excitement around this new trend is palpable. The auction room, once the domain of the seasoned investor, is now filled with a diverse mix of participants, each bringing their unique strategies and perspectives to the table. This diversity is not only driving up competition but also fostering a sense of community and camaraderie among participants.

In conclusion,

The tide of excitement caused by the massive increase in brand new buyers and sellers ready to use auction as their preferred method of sale is unstoppable. As we ride this wave, it’s clear that the world of property investment is evolving, offering new opportunities and challenges for all involved.

So, whether you’re a seasoned investor or a newcomer to the auction scene, strap in and get ready for an exciting ride!

The Increase in Property Being Sold at Auction

The statistics show a significant increase in the sale of properties at auction in recent years. Here are some key points to consider:

UK Property Auction Surge:

  • This year has seen nearly a 40% increase in the value of property sold at auction compared to 2019. Auction House and John Pye Property have experienced record performances, with transactions more than doubling in certain periods compared to the previous year

UK catches the property Auction Bug

  • Other auctioneers are also reporting similar surges in public interest, with success rates rising from 8 in 10 properties sold to well over 9 out of 10

 

Reasons for Popularity:

  • Property auctions are growing in popularity due to the increased marketing coverage on major portals like Rightmove and Zoopla, leading to more buyers, increased competition, and higher sale prices at auction

Home selling expert – do houses sell for less at Auction? The answer is NO

  • Auctions provide an unconditional sale, and properties can be legally sold once the hammer falls, which eliminates the waiting and frustration associated with traditional sales through estate agents

Property Auction popularity surges worldwide

Data Insights:

  • In October 2023, there was an 8.7% increase in total lots listed for auction and a 7.8% increase in lots sold by auction. Residential properties saw a 5.7% increase in lots listed and a 6.4% rise in lots sold, while commercial properties experienced a 39.3% increase in listed properties and a 22.0% increase in properties sold

Why are so many properties going to Auction – A competitors view

  • The surge in property auctions is not limited to the UK, as there has been a significant increase in the number of family homes being sold under the hammer across the country during the pandemic

Surge in UK homes being bought and sold at Auction

Impact on Sale Prices:

  • Houses sold at auction tend to achieve much higher prices now than they used to, and higher-priced homes generally tend to sell at auction compared to private treaties

The surge in property auctions reflects a shift in the real estate market, with more properties being sold at auction due to the benefits of increased marketing coverage, unconditional sales, and higher achieved prices.

 

If you have any specific questions or need further details, feel free to ask!

 

Tom@worldofauctions.co.uk

edward@worldofauctions.co.uk