Modern Method of Auction - Experiences and Tips?

eddddy

chaotic_j wrote: »

I have read online that the vendor will have entered into an agreement with the auction house and so it wouldn't be possible to buy outside of this process? i.e. the sale would have to progress via what they have signed up for? Is that correct?

There's one main company that does this kind of auction. Last time I looked at their contract (a few years ago), it was roughly as follows....

The seller gives the auctioneer sole selling rights.

If the property is sold through the action process, the buyer pays a 3.5% fee.

If the seller accepts an offer outside the auction process, upon exchange of contracts, the seller must pay the 3.5% fee (plus a £300 auction withdrawal fee).

So you're free to make an offer using either route.

It's down to the mindset of the seller whether they accept an offer outside the auction process...

The auctioneer might try to persuade them not to

The seller may not understand (or have even read) the contract they signed, and realise that they have a choice.

The seller may believe that you will bid up to your max price (adjusted by 3.5%) at the auction anyway, so why accept an offer?

sparky130a

eddddy wrote: »

There's one main company that does this kind of auction. Last time I looked at their contract (a few years ago), it was roughly as follows....

The seller gives the auctioneer sole selling rights.

If the property is sold through the action process, the buyer pays a 3.5% fee.

If the seller accepts an offer outside the auction process, upon exchange of contracts, the seller must pay the 3.5% fee (plus a £300 auction withdrawal fee).

So you're free to make an offer using either route.

It's down to the mindset of the seller whether they accept an offer outside the auction process...

The auctioneer might try to persuade them not to

The seller may not understand (or have even read) the contract they signed, and realise that they have a choice.

The seller may believe that you will bid up to your max price (adjusted by 3.5%) at the auction anyway, so why accept an offer?

Which just goes to prove, You've got to be a nutcase to either sell or buy via this method. Or deeply desperate. Or both.

davidmcn

eddddy wrote: »

There's one main company that does this kind of auction. Last time I looked at their contract (a few years ago), it was roughly as follows....

The seller gives the auctioneer sole selling rights.

If the property is sold through the action process, the buyer pays a 3.5% fee.

If the seller accepts an offer outside the auction process, upon exchange of contracts, the seller must pay the 3.5% fee (plus a £300 auction withdrawal fee).

So you're free to make an offer using either route.

It's down to the mindset of the seller whether they accept an offer outside the auction process...

The auctioneer might try to persuade them not to

The seller may not understand (or have even read) the contract they signed, and realise that they have a choice.

The seller may believe that you will bid up to your max price (adjusted by 3.5%) at the auction anyway, so why accept an offer?

Irrespective of who's paying, what is the agent doing that deserves 3.5%, when others would do it for more like 1%?

I'd avoid this procedure out of principle, but you'd certainly want to do all your due diligence in advance of handing over anything.

stator

If you REALLY want this house then by all means go ahead on the condition that you treat it like a REAL auction
BEFORE you place your bid you must have
A) A mortgage OFFER for that particular property
Completed all your structural surveys
C) Had your solicitor do all the legal work prior to exchange.
In this scenario you are risking the money you spend before bidding, so could be out bit at any time. But this is not very different to the normal situation where you have to spend thousands before exchange of contracts. Before considering this I would try and get a feel from the agent as to whether anyone else is interested or not.

Not all cracks mean something significant, cracks in the render can just mean it's old. Hairline cracks aren't generally a huge concern, it's when you can stick something in the gap that it's worrying. Either way you'll want a structural survey.

It's your money to risk.

chaotic_j

Well when the online auctioneer called I told them my thoughts! and said if I was to put in an offer it wouldn't be their minimum etc..

They said.. how much is it worth to you? Put in an offer! i.e. they have invited me to put in a low ish offer?

Worth doing?

eddddy

chaotic_j wrote: »

Well when the online auctioneer called I told them my thoughts! and said if I was to put in an offer it wouldn't be their minimum etc..

They said.. how much is it worth to you? Put in an offer! i.e. they have invited me to put in a low ish offer?

Worth doing?

Hmmm - davidmcn and stator seem to say you'd have to be unprincipled and/or a nutcase to make an offer.

Personally, I would offer what it was worth to me, perhaps starting low in the hope of getting a bargain (assuming no upfront fee is demanded).

But then maybe I am an unprincipled nutcase.

stator

chaotic_j wrote: »

Well when the online auctioneer called I told them my thoughts! and said if I was to put in an offer it wouldn't be their minimum etc..

They said.. how much is it worth to you? Put in an offer! i.e. they have invited me to put in a low ish offer?

Worth doing?

Make an offer if you can do it within the criteria I outlined above. If you can't get everything sorted and 100% before making an offer, don't make an offer.