Auction cut prices on property

Potential property purchasers that want to take their chances on properties that go up for sale at auction could benefit according to a recent report, which suggests that auctions are cutting the prices of their properties. Auctioneers are being forced to cut the prices on properties going under the hammer due to the housing slump, and many buyers heading for the auctions could enjoy huge savings as a result of this.

Reports show that the downturn in the housing market is resulting in many properties failing to sell. Due to this auctioneers are telling sellers that they must put realistic reserve prices on properties otherwise they may refuse to put the property under the hammer. Industry officials have released figures that show that in the three months to August only 54 percent of properties going under the hammer sold, and this compared to 71 percent a year earlier.

One auction specialist stated: ‘Auctioneers are getting harder and harder on vendors and saying prices just have to come down. If you have a house at an estate agent that’s been trying to be sold at £300,000 and isn’t going, then the reserve needs to be £220,000 or £230,000 maximum, not £280,000, otherwise it just isn’t going to appeal.’

Many people are turning to auctions in order to buy property given the reluctance of many sellers to reduce their asking prices even through property prices have been plummeting. The lower level of properties now selling at auction also means that it might be possible for interested parties to negotiate the minimum prices on those leftover with the vendors, according to industry officials.