How to Auction Your Property

Hong Kong Property Auction: Detailed Explanation of the Six Core Processes

This process comprehensively covers the complete auction process from commission to transaction, and is applicable to all types of properties such as residential, commercial, office, parking spaces, etc.:
  1. Commission preparation - the owner provides property information and sets the reserve price
  2. Professional valuation - the auction house verifies the ownership and market positioning
  3. Contract signing - clarify key terms such as commission and agency period
  4. Three-dimensional marketing - multi-channel publicity to attract potential buyers
  5. On-site auction - open bidding and hammer determination
  6. Transaction processing - complete the transaction or redeploy according to the results
Key points:
  • The entire process from commission to auction is completed within about 3-6 weeks, and the transaction is completed within 1-3 months
  • How the auction house charges service fees or commissions
  • How do owners collect deposits and balances?
  • The process is applicable to special properties such as bank-owned properties and court orders hhvv
  1. Step 1: Owner provides property information
  2. Step 2: The auction house provides a professional valuation
  3. Step 3: Sign the Auction Commission Contract
  4. Step 4: Three-dimensional marketing
  5. Step 5: On-site auction process
  6. Step 6: Auction results and solutions
  7. Scenario 6A: Transaction exceeds the reserve price
  8. Scenario 6B: Reserve price not reached (unsold)
  9. Scenario 6C: No bidder

Step 1: Owner provides property information

The owner needs to provide the following basic information (including but not limited to):
  • Complete address (including building name, floor, unit)
  • Saleable area/building area (square feet)
  • Property type (residential, shop, office, parking space, etc.)
  • Current use (self-use, rental, vacant/deposited)
  • Lease information (if there is a tenant, a copy of the lease and rental income must be provided)
  • Property status certificate/photos (key areas such as living room, room, kitchen, bathroom, etc.)
  • Acceptable reserve price
Hong Kong Property Auction House Recommendations

Step 2: The auction house provides a professional valuation

Some auction houses provide free search and valuation services to help you fully understand the property status:
  • Land Registry - Search
    ✓ Confirm the identity of the owner and the integrity of the title
    ✓ Check the property's past transaction records and prices
    ✓ Attach an approved building plan (verify the saleable area)
  • Rating and Valuation Department - Search
    ✓ Verify the age, area and permitted use of the government records
    ✓ Compare the rateable value (assess the rental potential)
    ✓ Check the property's subdivision status (whether it involves illegal reconstruction)
Combined with market data, a reasonable auction reserve price is recommended:
  • Recent transaction case comparison
    ✓ Transaction price of similar properties in the same area within 3 months
    ✓ Special attribute adjustment (sea view/decoration/floor factor)
  • Discount rate for silver-owner properties/court-ordered properties
    ✓ 5-15% price adjustment applies depending on the property condition
Cost and profit calculation

Step 3: Sign the Auction Commission Contract

Both parties arrange a time to sign the "Commissioned Auction Contract". The owner needs to prepare the following documents for verification:
  • Proof of identity (individual: ID card/passport; company: business registration certificate and company seal)
  • Copy of property deed (confirm that the owner and the signatory are the same)
  • The latest land search record (the auction house can be entrusted to check)
The "Commissioned Auction Contract" specifies the key terms:
  • Commission ratio (usually 1% of the transaction price)
  • Property agency period (usually from the signing date to a few working days after the auction ends)
  • Auction/service fee (HKD $3,000 - 5,000)
  • Auction date
  • Auction opening price/reserve price (the seller can set it by himself, and the auction house will also provide reasonable reserve price suggestions)
  • Transaction completion date (if the hammer is completed, the buyer generally pays the balance within 1-3 months to complete the transaction)
  • Negotiate special sales conditions (such as "lease-attached" sales)
  • Liability for breach of contract (including compensation clauses for both buyers and sellers)
Note: The auction house will simultaneously check the land search records to confirm that the ownership is clear and eliminate potential ownership issues (such as inheritance, shared ownership)

Step 4: Three-dimensional marketing

Auction house launches four-track parallel promotional strategy:
  1. Traditional channel coverage
    • Publish auction announcements in daily newspapers such as Star Daily and Economic Daily
    • Post posters/leaflets in target areas (focusing on regional assets such as shops and parking spaces)
  2. Digital Precision Marketing
    • Official/Social Media Featured Pages (with images/links)
    • Send customized emails (screening customers by budget) to active investors in the database
  3. Oriented Customer Development
    • Call buyers who have recently participated in the auction and have not completed the transaction
    • Contact a real estate agent to cooperate in showing the property (for vacant properties)
  4. Field Open Day Arrangements
    • Auction houses can arrange open days for potential buyers to visit (for vacant properties)
    • Provide reservation-based viewing sessions to ensure investors fully understand the condition of the property
    • If a potential buyer makes a reasonable offer on the open day, the auction house can:
      ▸ Contact the owner immediately to negotiate an early private sale
      ▸ If an agreement is reached, the public auction can be canceled and a temporary purchase contract can be signed

Step 5: On-site auction process

  1. The auctioneer opens with an announcement
    • Introducing basic information about the property (address, area, use, etc.)
    • Clarifying auction terms (payment period, special terms, commission, etc.)
    • Confirming that bidders have reviewed the title documents and on-site instructions
  2. Open bidding phase
    • The auctioneer announces the opening bid (usually lower than the owner's reserve price)
    • The bidder raises his hand to bid, and the auctioneer confirms the bid
    • The bids gradually increase (e.g. HKD $100,000/lot), and the auctioneer controls the rhythm (e.g. "first time, second time...")

Step 6: Auction results and solutions

Auctioneer’s hammer determines the result
  • Scenario 6A: The highest bid reaches/exceeds the reserve price
    ✓ The auctioneer knocks the hammer to announce the deal, and the buyer signs a provisional contract on the spot
  • Scenario 6B: The highest bid does not reach the reserve price
    ✓ The auctioneer announces a failed sale
  • Scenario 6C: No one bids
    ✓ The auctioneer ends the auction of the property directly
Note: Some properties that have been unsold or recovered may be rescheduled for auction according to the auction house’s procedures. The specific arrangements (such as reserve price adjustment, re-auction time, etc.) will be notified separately by the auction house.

Scenario 6A: Transaction exceeds the reserve price

  1. Signing a provisional contract
    • The buyer signs the provisional sales contract on site to confirm the terms of the transaction
  2. Buyer pays a deposit
    • The buyer pays a 10% deposit (cash, bank draft or check) of the transaction price
    • The deposit is temporarily held by the auction house or agent
  3. Deposit escrow process
    • After the auction house deducts 1% commission, the remaining amount will be handed over to your representative lawyer for escrow
    • If the property is still mortgaged
      ✓ The deposit will be used to repay the bank loan first
      ✓ The remaining amount will be transferred to you after the redemption is completed
    • If the property is no longer mortgaged
      ✓ The deposit after deducting the commission will be paid directly to you
      • Buyer pays 10% deposit → deduct commission →
      • With mortgage: lawyer pays the bank → the balance is given to you
      • Without mortgage: collect payment directly
  4. Subsequent arrangements
    • The auction house provides a transaction memorandum, which lists:
      • ✓ Final payment deadline (usually 1-3 months to complete the transaction)
      ✓ Legal procedure timetable
      ✓ Delivery arrangements
Cost and profit calculation

Scenario 6B: Reserve price not reached (unsold)

  1. Follow-up follow-up actions
    • Auction houses can proactively contact participating buyers to understand bid intentions
    • Analyze the reasons for failure
  2. Repricing Strategy
    • Consult with you to adjust the auction floor price (usually down 5-15%)
    • Optional:
      ✓ Reschedule the next auction (may be at no additional cost, subject to contract terms)
      ✓ Switch to private negotiations with interested buyers
  3. Enhanced marketing (including but not limited to):
    • Newspapers, posters
    • Targeted email promotion
    • Arrange additional open days for buyers to view properties

Scenario 6C: No bidder

  1. Repricing Strategy
    • Consult with you to adjust the auction floor price (usually down 5-15%)
    • Optional:
      ✓ Reschedule the next auction (may be at no additional cost, subject to contract terms)
      ✓ Switch to private negotiations with interested buyers
  2. Enhanced marketing (including but not limited to):
    • Newspapers, posters
    • Targeted email promotion
    • Arrange additional open days for buyers to view properties

Want to know more about property auctions?
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