Downsizing from a four-bed to a two-bed in London could free up around £414,000, according to Which? research. For anyone who has lived in London for 30 years, this could present a great opportunity coming up to retirement. What’s better is that this can be achieved without the long waiting periods of the traditional real estate market.

The Issues With Downsizing.

From reducing living expenses, embracing a minimalist lifestyle to relocating for a new job, downsizing can be driven by various life changes. There are, of course, other scenarios that don’t take into account this definition, such as an elderly couple that needs the care from an assisted living facility, or divorce.

One of the main issues with downsizing is that traditional means through estate agents are dependent on the chain not falling through. When looking for your ideal home, you’re usually waiting for your sellers to buy their own place — and even then that’s not guaranteed to go through. 

Beyond the unpredictability of property chains, the emotional stress and time-consuming negotiations can deter many from pursuing a traditional sale. The process will take up a lot of your time, and it can often feel unending. Fortunately, selling via auction can relieve a lot of this hassle.

Selling a Property Through Auction.

Far from the estate agent route on the housing market is the option to go to auction. If speed is necessary, this can be the best avenue to go down. Where it’s not unusual for homes to take months to complete when using an estate agent, properties sold at auction can be done within a matter of weeks.

The auction process starts with an appraisal of your property, setting a reserve price, marketing the auction, and then the live bidding event. Unlike selling through a chain, there’s less of a chance that a buyer can pull out of the process. While it’s legally binding, if the buyer decides they no longer want the property, you will keep the initial deposit (which is transferred after the sale is agreed) and the house is relisted.

On the downside, it’s worth noting that you won’t get the full market value of your home when you sell through auction. What you make up for in speed of selling, you lose in the form of 10—20% off its potential market value. However, you won’t then be paying estate agent or legal fees. Auction fees sit at about 2%, but there’s a chance you might be able to pass these onto the buyer.

How Properties are Valued at Auction.

It’s important to understand that you can potentially get more for your home when selling through auction. The market decides what the house is worth and what the reserve price is. This process shouldn’t dishearten you though because bidders may always be willing to pay more. 

A valuer will give you a suggestion of what the house might be worth at auction using their experience, but this isn’t to say how much you’ll receive for your home. The process is much more robust than anything you’ll get through an instant buy company, as the price has the potential to only go up.

Benefits of Downsizing.

In terms of advantages, downsizing can also lead to a more manageable, stress-free lifestyle. With fewer rooms to clean and maintain, you can spend more time on hobbies, travel, or with loved ones. It also comes with other benefits.

• Receive additional funds to pay off your mortgage
• Free up equity above the sale price (if you’ve paid off your mortgage)
• Cheaper bills
• Less maintenance
• Better amenities

Should I Downsize Through an Auction House?

Whether to go through an estate agent or an auction house can often depend on the speed of sale that you need. When downsizing, you need to weigh up the pros and cons of the whole process, as there are always costs involved. However, in some cases, selling your current home at auction can offer you the fast service that you might need.

If you’ve already found your ideal smaller property and can’t afford to hang around, then selling at auction could present you with the perfect opportunity. No waiting around for chains, and no endless worry about sales falling through. 

Don’t let the complexities of traditional sales delay your downsizing plans. Book a free, no-obligation valuation with Keyco today and learn more about how the auctioning process can provide a quick, seamless transition to your new home.