Selling Commercial Property at Auction and the Benefits and Risks Involved

Selling a commercial property at auction comes with various benefits and risks you should be aware of. MOVEHUT 's guide will help you decide whether your commercial property is suitable to be sold at auction, considering the advantages and disadvantages involved.

Benefits of Selling a Commercial Property at Auction

Selling commercial property at auction is an increasingly popular method of sale. Selling by auction can generate maximum exposure for each lot and provide the seller with the best possible results. However, it is an entirely different experience to selling by private treaty and it’s essential that you understand every aspect of the process in order to decide if entering your property into a commercial auction is the right option for you.

Selling commercial property at auction provides a number of benefits. These include:

1. Speed of transaction – As opposed to private treaty, selling property at auction is fast and simple. The entire process, from providing the auctioneer with details of the property to completion, can take as little as six weeks. The benefits of this are clear, particularly in the case of sellers who have a number of properties they wish to dispose of in a short time.

2. Exposure to the market – Auctioneers are experienced in marketing and will provide your commercial property with the best possible exposure prior to auction. Alongside inclusion in the catalogue, auctioneers also advertise upcoming lots in the local, national and trade press and, increasingly, on commercial websites such as MOVEHUT . Many auction houses also have close contact with registered investors who are kept informed of properties that are likely to interest them. In addition, actively promoting their lots on MOVEHUT generates interest from the increasing numbers of businesses and investors searching for commercial property online.

3. Success rate – Selling commercial property at auction provides you with a great opportunity of achieving the best market price. In addition there is a high sale rate at auctions and even those lots that fail to attract bidders on the day are often sold shortly afterwards.

4. Certainty and security – When you sell commercial property at auction, the fall of the hammer grants you the certainty that the lot is sold. At this moment the buyer is legally bound to complete the purchase and contracts are immediately exchanged. Furthermore, the speed of the auction process provides you with the added security of knowing that completion will follow within 28 days.


While the benefits of selling commercial property at auction are attractive, in order to avoid disappointment, you should be aware of the possible drawbacks before going ahead;

1. Pricing – Your commercial property will have a reserve price at auction below which it won’t be sold. However, the auction market can be volatile and while the bids may appear to be rising sharply this is because they started low. While there is every chance of achieving a good market price, you should remember that there is no guarantee of your property realising the price you may be anticipating.

2. Commission and fees – Selling commercial property at auction can be a competitive option, especially if your property is priced correctly. Auctioneers take a commission which is a percentage of the sale price and you should ensure that you are clear about what this is. They also charge an auction entry fee to cover their costs and you should be aware that this is payable even if the property fails to reach the reserve price.


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