'Modern auction method'

supa34

Heaving recently been to two auctions hosted by iamsold I know where you are coming from.

However they clearly say at start to factor in the fee. So if you want to spend 100k then bid up to 95k. Everyone is in the same boat.

I saw a house for 65k and was wiling to go to 90k. It went for 100k.

So you just need to factor in the fee and bid accordingly. If someone wants it more than you they will bid more. That's buissness. Highest bidder gets it.


Alot of auction are sold prior to auction which is annoying, but that's because they have met the sellers asking price combined with interest they have. Only way to overcome that is to put bid on the site.

spiritus

supa34 wrote: »

Heaving recently been to two auctions hosted by iamsold I know where you are coming from.

However they clearly say at start to factor in the fee. So if you want to spend 100k then bid up to 95k. Everyone is in the same boat.

I saw a house for 65k and was wiling to go to 90k. It went for 100k.

So you just need to factor in the fee and bid accordingly. If someone wants it more than you they will bid more. That's buissness. Highest bidder gets it.


Alot of auction are sold prior to auction which is annoying, but that's because they have met the sellers asking price combined with interest they have. Only way to overcome that is to put bid on the site.

Yes, every potential buyer is in the same boat but I think it creates an an additional hurdle to the buyer AND seller which is unnecessary.

The seller doesn't necessarily get more money and the buyer has to pay more money (unless the guide price is realistic which often it isn't) so the only party gaining is either the auction house or the EA

Silversurreal

Sorry if I'm missing a relocated thread, but any updates on this and anyone in 2019 going for these Modern method of auctions? Are prices generally well below the property's worth or about what the vendor wants and will accept?

eddddy

Silversurreal wrote: »

Are prices generally well below the property's worth or about what the vendor wants and will accept?

The vendor sets a reserve price - which is the minimum that they will accept.

If bidding doesn't reach the reserve price, the property isn't sold.

I don't think the company publish statistics on the percentage of properties where bidding doesn't reach the reserve price.


However, the following might be interesting...

• The advertised guide price for a property is likely to be 10% under the reserve price

• The auctioneers seem to list 'sold prices' on their website

So by searching around, you can compare "Guide price + 10%" to "sold price" to see if properties are selling at the reserve price, or at a higher price.

davidmcn

eddddy wrote: »

The vendor sets a reserve price - which is the minimum that they will accept.

If bidding doesn't reach the reserve price, the property isn't sold.

I don't think the company publish statistics on the percentage of properties where bidding doesn't reach the reserve price.

However, the following might be interesting...

• The advertised guide price for a property is likely to be 10% under the reserve price

• The auctioneers seem to list 'sold prices' on their website

So by searching around, you can compare "Guide price + 10%" to "sold price" to see if properties are selling at the reserve price, or at a higher price.

I think you're describing normal auctions, rather than the "modern rip-off by estate agents" method which the thread is about.

D_M_E

Now that the fees agents charge tenants are being imminently clamped down on, there's most likely going to be more of these modern fleece methods of selling - and other devious ways to increase agents' income - to recoup losses and more from the clampdown.

eddddy

davidmcn wrote: »

I think you're describing normal auctions, rather than the "modern rip-off by estate agents" method which the thread is about.

Nope - I'm definitely talking about the 'Modern Method'.

Most estate agents use a company called Iamsold to do the auctions on their behalf.

Which parts of my post do you disagree with?

eddddy

... the key differences between the 'Modern Method' and 'Traditional Method' are:

• The 'Modern Method' is a conditional auction. Essentially, you are bidding to buy the right to reserve a property, not to buy the property. (By winning the auction you are not contractually bound to buy the property.)

• But the buyer's reservation fee is extortionate - a minimum of £6k - which goes to the auctioneer. The reservation fee is not deducted from the price of the property, and it is not refunded if you decide not to buy.

stator

Silversurreal wrote: »

Sorry if I'm missing a relocated thread, but any updates on this and anyone in 2019 going for these Modern method of auctions? Are prices generally well below the property's worth or about what the vendor wants and will accept?

In 2019 it's still a scam. Avoid

Richard_Copus

As an established auctioneer concerned with compliance issues, it has been very interesting reading the threads concerning the so called "modern" method of auction, which is not modern at all, simply an alternative method. Whilst there is definitely a case for encouraging the use of Conditional auctions in some cases because they allow extra time for people who have the monies n their account to buy, but cannot release the sum in time for the auction date for example, this practice of charging buyers massive premiums is iniquitous.

Readers may be interested to know that the vast majority of firms dealing with the "Modern" method are not auctioneers at all but ordinary estate agents. They have been targeted by various companies who have set themselves up as auctioneers with the promise of the agent being able to earn tens of thousands of extra pounds easily and with the minimum of effort by marketing clients' properties this way. The buyer's fee is split with the "auctioneer" and the estate agent handling the marketing. In these days with profits minimal or non-existent, one can see why many agents are attracted by this offer.

The main problems with the "Modern" method are as follows:

1. The high buyer's premium reduces the number of bidders and the amount the seller will achieve for his/her house;
2. The premium is added to the purchase price for Stamp Duty purposes.
3. The premium is not a deposit and is not part of the purchase price of the house;
4. The premium may affect the would-be buyer's ability to borrow;
5. None of the premium is returnable in the event of non-purchase;
7. Vulnerable sellers are being encouraged to sell this way by being offered a no-fee deal, or with one firm a cash-back in the event of sale;
8. Sellers are not being told that they will probably receive less for their home by selling this way;
9. Sellers are not being told that the legal primary duty of care is to the person paying the agent, i.e. the buyer.

The Modern Method is a can of worms and one that I would advise house hunters to avoid at all cost, unless they find one of the very, very few outfits out there who charge no or a simple buyer's admin fee of a few hundred pounds. This whole system has been set up as a money spinner with little concern about its effect on the consumer. The Property Ombudsman and Trading Standards are currently looking into the method and would welcome comments from anyone who has had problems buying or selling this way.

The "modern" method must not be confused with the traditional method of selling at auction which has been going for at least a century, is fair on buyers and is recognised by the courts as proof of best price having been obtained.

Richard