Auctions Via Traditional Estate Agents

eddddy

MrBox wrote: »

Just out of interest, how does the seller stand once the auction reaches its deadline date? I know that the auctions tend to reset if no bids are made and the property is just re-listed, but are there typically any loopholes allowing them to switch to a different agent/seller at such a time?

Based on their contract from a few years back...

The seller gives the Auction House sole selling rights for a minimum period of 8 weeks. That covers the run-up to the auction and the auction date itself.

The seller can terminate the contract with 21 days notice.

As previously stated, if a buyer is introduced during the 'sole selling rights period' and then buys within 6 months / 2 years, the Auction House's fee is payable.

MrBox

eddddy wrote: »

Based on their contract from a few years back...

The seller gives the Auction House sole selling rights for a minimum period of 8 weeks. That covers the run-up to the auction and the auction date itself.

The seller can terminate the contract with 21 days notice.

As previously stated, if a buyer is introduced during the 'sole selling rights period' and then buys within 6 months / 2 years, the Auction House's fee is payable.

I understand this, I just meant would the end of the auction not not trigger a renewal period (and then a cancellation right) of the auction agreement as it has effectively reached it's end and not been successful?

From your answer I guess it possibly does, but this still is not going to help us as technically we were introduced to the property while it was under auction (and seriously undervalued). Even though the only real reason we can't successful buy this property is purely because of the "buyers premium" fee.

So, if what you are saying is correct, even if the seller reached the end of the auction without a successful bid and she was eligible to terminate (assuming that they allow this at the end of the auction as well as renewing the auction) , even then we wouldn't be able to buy this property without potentially paying that fee purely because we saw this property listed on an Estate Agents website and arranged a viewing via them while it was classed as an auction property.

That is absurd, especially in our situation where both seller and ourselves feel the auction company have been very unscrupulous and misleading with their information. In our specific case, the seller is basically trapped and forced to exclusively sell via auction, and the only other viable option being to take property off the market for a period of up to two years before re-marketing it.

Interesting if disappointing to hear. To me this is another PPI scandal waiting to happen. If nothing else it's educated us before we've fell foul of this scam though, and it's meant we'll just be giving a wide birth to these properties in the future. Cheers.

MyOnlyPost

The clauses regarding introducing clients are standard with EA whether auction or traditional sale. Consider the other side of the coin, if you were free to sell after cancelling EA, everyone would use the EA to find a buyer, terminate the contract and sell privately to avoid fees.

As per my previous post, legal advice is needed, you won't get that here

MrBox

MyOnlyPost wrote: »

The clauses regarding introducing clients are standard with EA whether auction or traditional sale. Consider the other side of the coin, if you were free to sell after cancelling EA, everyone would use the EA to find a buyer, terminate the contract and sell privately to avoid fees.

As per my previous post, legal advice is needed, you won't get that here

I appreciate why EA's insist on the exclusive rights and understand their need for them, I'm not disputing that they need to protect genuine sales. Nor am I even disputing auction houses having a fixed fee for their services (even if I do feel they are grossly inflated!).

I just feel in our particular experience both the buy and the seller have been deliberately mislead as to the T&Cs of buying/selling via auction, which has lead to confusion. And it seems it's not the first time with this particular company as my father in law has had a similar experience and reading through the companies feedback on the internet, so have other customers.

This in turn has lead to us wasting our time (missing out another property in the meantime), the property itself being marketed falsely and the seller getting pressure to sell for below the market value of the property.

It absolutely stinks and I think there should be a lot tighter regulations about how these companies inform customers and sellers of their fees and rates. Even how the properties themselves are marketed. This method of sales has ultimately cost the property owner a genuine sale and effectively prevented us buying a property within our price range that we could/would have bought. Worst of all I know that this is all down to a certain EA pushing this method of sale onto sellers in a casual and misleading way as it gets them and their affiliated auction house a lot more money .

Now that we're aware of this, we've actually browsed the website we spotted the property on and notice this auction companies properties are advertised in multiple ways, some are clear its an auction property, some are not. Some have it clear there is a buyers premium, some do not. There is no consistency and none of the property adverts mention the exact amount or rate of the buyers premium and every property has a massively low "guide price", which I understand is standard practice for auctions but come one - this isn't Ebay, you are talking about hundreds of thousands of pounds worth of property, it shouldn't be this shady! You can't even filter auction properties out of at least two of the big property websites!

It should be more transparent and less reliant on people making expensive mistakes based on presumptions and incorrect or badly worded explanations! I can see some of the less reputable auction companies (and affiliated EAs) exploiting this, as we feel is the case with our local EA & Auction team.

martindow

lincroft1710 wrote: »

Until the 1970s the vast majority of sales of existing (as opposed to new-build) properties were by auction, admittedly the "old fashioned" method of auction

Is that so? I don't think this was the case when I first bought a house in Hampshire in the 1970s.

Maybe auctions were more more common in some areas of the country than others.