The Modern Method of Auction gives sellers the opportunity to sell their property for the best possible price, quickly and securely, and places the property before a wider audience of potential buyers. Sellers pay no estate agent fees and fixed timescales mean buyers must exchange and complete within 56 days.
Benefits of selling using the Modern Method of Auction
- A seller does not pay any estate agency fees and keeps the full selling price
- Sales are secured because the buyer pays a Reservation Fee and signs a Reservation Agreement
- Provides a fixed, realistic time frame that ensures buyers exchange and complete within 56 days
- Sellers can set a reserve price to make sure the property sells for a price they are happy with
- Because bidding takes place online, it can take place 24/7. This provides greater exposure to prospective buyers and increases interest
- Competitive bidding can help to drive up the sale price
- The seller receives real-time updates on the bidding and can track and view previous bids, meaning they can see how well the property sale is going at any time of the day
Benefits of buying using the Modern Method of Auction
- Access to property information packs at the start means buyers can make informed decisions before bidding on a property
- There are no hidden fees to pay, so a buyer will know exactly what they have to pay if they are successful after the auction has ended
- A buyer can be confident the sale will proceed
- Buyers have the freedom to place bids remotely at any time using the online auction platform. Auction platforms also let buyers set bid limits and track progress.
How does the Modern Method of Auction work?
An estate agent markets the property in the usual way, preparing sale particulars and appearing on their website. The difference from the more traditional way of selling a property is that the seller, in conjunction with their estate agent, sets a reserve price and an end date for the auction.
Potential buyers then register to enable them to participate in the auction. Buyers compete against each other by increasing their bids until the auction ends. They are automatically notified when a counter-bid has been received and given the opportunity to increase their bid. Subsequent bids must be increased by at least £500. If there is a high level of interest, the auctioneer may extend the end date so the property achieves its best price.
The successful bidder is then required to pay a reservation fee. This is a percentage of the purchase price and is often set to a minimum figure in order to cover the estate agent's costs. Both of these costs should have been communicated to the buyer before bidding.
The reservation fee does not form part of the purchase price and is non-refundable. As a buyer, it is important to know they would need to pay Stamp Duty on the total: so the purchase price and the reservation fee combined. Following acceptance, the buyer is then given 28 days to exchange contracts and a further 28 days to complete the sale.
Express Conveyancing is a nationwide, specialist property solicitor panel. We assist hundreds of first time buyers, property investors and home movers with their conveyancing needs. Our specialist property auction property solicitors will be more than happy to assist you with your next property purchase through the modern method of auction. Contact us today for a free, no obligation quotation.