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Selling a problem property by auction

If you’re looking to sell a building or plot of land which has problems or issues that buyers may be wary of, selling by auction may be the best method for you. The reputation that ‘problem properties’ have as being hard to sell is largely a result of sellers struggling to get the lot in front of the right buyers. Estate agents, for example, typically attract residential home-buyers and those who require traditional financing to support the purchase. By comparison, auctions attract large numbers of experienced investors and cash buyers who can look beyond the issues a property has to see the potential it presents.

Additionally, by selling via methods without any competitive bidding, you might find that sales estimates are very low due to a lack of interest. As such, a property auction could provide a viable alternative that may help you secure a faster sale at a better price. Keep reading as we share our advice for selling a problematic property by auction, and detail some of the most common problems seen within the housing market.

Selling a house with subsidence

Subsidence happens when the ground beneath a building starts to sink, move, or collapse. It is a serious issue that can affect the structural integrity of the property as well as the foundations. The level of subsidence will affect how much your property is devalued, as underpinning will need to be carried out to fix the issue. However, as long as you disclose any issues with subsidence or historical subsidence, you will still be able to sell your property by auction. This is often a better option than selling via an estate agent, as there will be no setbacks whilst a surveyor carries out an inspection and potential buyers try to negotiate a sale price. 

Subsidence is commonly found in older structures due to the methods of building at the time, whereas newer builds can typically cater to these flaws and shouldn’t be struck with subsidence issues. Additionally, some regions of the UK such as the south-east are more likely to face subsidence than others due to higher levels of clay in the soil. Common signs to look out for include cracks that are wider than 3mm, especially if they appear close to doors or on windowsills or if they appear diagonally across a wall, sticking doors and windows, bulging walls, rippled wallpaper, or if the property appears wonky. 

Structural issues are best dealt with when they’re caught early to prevent the issues from worsening, and estate agents may encourage you to deal with these issues yourself if you can to achieve a higher sale price. However, this is not necessary when selling by auction as a property can still be sold even with existing faults. Although when it comes to auctions, you must still disclose any structural defects as well as any measures you have taken to rectify them in the legal pack. It should be noted that even if your property has been underpinned, you should still expect to see a decrease in property value.

Selling a house with Japanese knotweed

Japanese knotweed is an invasive and particularly problematic issue. Its growth can affect the condition of a property as it can cause damage to the structure. It’s important to note that this species has rhizomes that can grow up to seven metres horizontally, so even if the plant isn’t located within the building or immediately adjacent to it, if the plant is found in the garden this could still cause issues for the buyer.

Japanese knotweed may not sound like an issue that would be difficult to tackle, but this invasive species is not easy to get rid of. The plant needs specialised treatment and soil extraction, as any normal household weed killer or other solutions such as using fire or a lawnmower will not destroy the plant, it will grow back without the help of professionals. Luckily, severe infestations are quite rare and the plant can be dealt with accordingly. This will usually devalue the property between 5-15% or equivalent to the cost of removing the knotweed. 

Many buyers are put off by the notoriety of Japanese knotweed, but investors are usually not unfamiliar with the problem and will be able to spot potential in a property regardless of infestation. These investors are commonly found looking for their next projects at property auctions, making this a good option for those looking to sell a house with Japanese knotweed. You will need to declare any infestations in or around the property to give the buyer full visibility of the problem at hand. 

If your property is terraced or surrounded by others that you do not own, you should speak to your neighbours to let them know, or inform your buyer that they need to be notified, otherwise, a reinfestation could occur after the sale has been completed. An effective treatment and management plan could potentially take years, so you will also need to declare this in your legal park before heading to auction but you do not necessarily need to start treating the problem prior to selling as the buyer will assume responsibility.

Selling a house with old wiring 

Houses with wiring issues are more common than you expect due to our modern consumption of electricity. Older houses are simply not equipped to support this consumption. This issue needs to be taken seriously due to the risk it poses of starting electrical fires if any outstanding issues aren’t rectified. A qualified electrician can check your property for any violations that would require fixing, and this is a recommended practice for older houses. Some sellers may wish to rewire their house before selling to try and secure a better price, but this is not always the most financially viable option depending on the severity of the issue. 

Of course, not all old buildings will necessarily have outdated wiring and be deemed unsafe, which is why periodic checks by an electrician are useful to ensure the property is up to scratch. However, there are some signs to look out for that indicate if your property is not safe. This includes if you get slight shocks from power outlets, if you have flickering or dimming lights, if you’re using an old fuse box, if your property is more than 30 years old with the original wiring, or if your wiring is damaged or exposed. 

If you do choose to rewire a property, this could be very costly and furniture would need to be removed as well as carpets and flooring. This means that it may not be worth incurring these costs, but instead include a complete electrical report when it comes to selling so that the buyer has complete transparency of the issue the property faces. This is likely to devalue your house somewhat, but interest in a competitive property could still see you achieve a higher price than other selling methods.

How to sell any problem property

Whether your property is a commercial or residential building or even land, problem properties are not unsellable, nor do these issues necessarily need to be fixed by you prior to selling. It can be a headache to try and rectify any of the problems listed above, and this would often be needed when selling via an estate agent, otherwise, you could be faced with very little interest or a sale falling through. Selling by auction eliminates the hassle, as sales are fast, legally binding, and do not require the property to be fixed so long as the issues are disclosed to the buyer.

Auctions typically attract a large number of investors or those who flip properties, many of whom are experienced in dealing with these sorts of issues. You could therefore be more likely to make a successful sale at auction without needing to spend thousands of pounds on rectifying problems. At SDL Property Auctions, we can sell properties in any condition and make the process as smooth, efficient, and faff-free as possible. 

Before going through with your sale, there are a few questions you should ask yourself to help you consider if you’re going to set a minimum reserve price and what that should be, whether you want to fix any issues to achieve a higher sale price and whether you truly know the extent of the problems and are equipped with all of the information you need to make an informed decision. These questions include: 

  • How mild or severe are the issues? 
  • Does the property have one issue or multiple problems? 
  • What would the buyer have to pay to rectify the problem?
  • Can I easily fix any of these issues to eliminate any stigma or doubts about the property?

Sell with SDL Property Auctions

To get started with streamlining your portfolio or selling your property, you can book a free valuation with us using the button below to get a better idea of what your problem property could achieve at auction. Alternatively, you are welcome to contact our helpful team with any questions that you may have relating to the sale of your property, and we’ll be happy to assist in any way we can.