Modern method of auction

LawAbiding

I recently spoke to EA to put a offer in for a property going to Auction.

The EA explained the seller had signed an agreement for it to be sold on iamsold and they unable to back out of the contract without fees.

Reading comments here, will stay clear....

eddddy

hazyjo wrote: »

My guess is the seller is skint (like the person I know using it) or desperate.

... or the seller is just naive about selling property.

A number of EAs have tried to sell me on the idea of "the modern method of auction". I let them talk because I'm interested in their 'sales pitch'.

By being selective about the information they give, they can make it sound like a good idea.

But that's how a lot of salespeople sell.

eddddy

LawAbiding wrote: »

I recently spoke to EA to put a offer in for a property going to Auction.

The EA explained the seller had signed an agreement for it to be sold on iamsold and they unable to back out of the contract without fees.

Reading comments here, will stay clear....

As a buyer, that's not really a reason to stay clear.

You can make an offer and state that you won't pay the reservation fee.

In that case, the seller will have to pay the fee. (That's what the contract says - so it's not really 'backing out of the contract'.)

Obviously, it's up to the buyer whether they'll accept your offer and pay the fee.

LawAbiding

eddddy wrote: »

As a buyer, that's not really a reason to stay clear.

You can make an offer and state that you won't pay the reservation fee.

In that case, the seller will have to pay the fee. (That's what the contract says - so it's not really 'backing out of the contract'.)

Obviously, it's up to the buyer whether they'll accept your offer and pay the fee.

Good point.

I have been reviewing Iamsold T&C's and it doesnt mention anything (from what I can see) on the Terms if the seller wants to withdraw the property from Auction? Surely Auction sites have the same terms as EA's, where after a period of time, nothing is liable?

eddddy

LawAbiding wrote: »

Good point.

I have been reviewing Iamsold T&C's and it doesnt mention anything (from what I can see) on the Terms if the seller wants to withdraw the property from Auction? Surely Auction sites have the same terms as EA's, where after a period of time, nothing is liable?

The last time I looked - that auctioneer uses a "Sole Selling Rights" contract which covers the auction period, and is for a minimum of 8 weeks.

If any buyer (including you) introduced to the property during that "Sole Selling Rights" contract period, goes on to buy the property, the seller has to pay the fee to the auctioneer.

If the seller terminates the "Sole Selling Rights" contract (after 8 weeks), then no buyer introduced after that time will result in a fee being payable to the auctioneer.

LawAbiding

eddddy wrote: »

The last time I looked - that auctioneer uses a "Sole Selling Rights" contract which covers the auction period, and is for a minimum of 8 weeks.

If any buyer (including you) introduced to the property during that "Sole Selling Rights" contract period, goes on to buy the property, the seller has to pay the fee to the auctioneer.

If the seller terminates the "Sole Selling Rights" contract (after 8 weeks), then no buyer introduced after that time will result in a fee being payable to the auctioneer.

It looks like the first document for the property was "modified" 27th Nov 2018 and then the EPC was "modified" on 18th December.

We viewed the property in question in Late May via EA.

hazyjo

eddddy wrote: »

... or the seller is just naive about selling property.

A number of EAs have tried to sell me on the idea of "the modern method of auction". I let them talk because I'm interested in their 'sales pitch'.

By being selective about the information they give, they can make it sound like a good idea.

But that's how a lot of salespeople sell.

Really don't know why any EA would push it. They must surely know it's hated and that the properties will take far longer to sell. If I were an EA I would only suggest it on 'problem properties'. Would understand it if the vendor had to pay a fee to list or commission upfront, but it just seems like madness to me. Perhaps there are more buyers willing to use it (and pay the fee early or within a short timescale) than I realise...

eddddy

LawAbiding wrote: »

It looks like the first document for the property was "modified" 27th Nov 2018 and then the EPC was "modified" on 18th December.

We viewed the property in question in Late May via EA.

Based on the version of their contract that I have (which is a few years old).

Assuming...

• you viewed the property after the seller signed a contract with the EA, but before they signed the auction contract (i.e. The auctioneer's 'sole selling rights' contract hadn't started.)

• You have not 'negotiated' via the auctioneer. (i.e. You've not made an offers via the auctioneer)

• The seller terminates the 'sole selling rights' contract with the auctioneer before contracts are exchanged

...then the seller should only have to pay the original EA's fee - maybe 1.5%. Plus perhaps an auction withdrawal fee (£500?)

But I suspect that the auctioneer might put up a fight. Some sellers might not feel confident about fighting the auctioneer, and give in.

(And it sounds like your EA might not want a fight either, perhaps to avoid spoiling their business relationship with the auctioneer.)

AdrianC

Surely it's simple? Make an offer for £10k less than you'd be willing to pay if it was on the market normally.

LawAbiding

eddddy wrote: »

Based on the version of their contract that I have (which is a few years old).

Assuming...

• you viewed the property after the seller signed a contract with the EA, but before they signed the auction contract (i.e. The auctioneer's 'sole selling rights' contract hadn't started.)

• You have not 'negotiated' via the auctioneer. (i.e. You've not made an offers via the auctioneer)

• The seller terminates the 'sole selling rights' contract with the auctioneer before contracts are exchanged

...then the seller should only have to pay the original EA's fee - maybe 1.5%. Plus perhaps an auction withdrawal fee (£500?)

But I suspect that the auctioneer might put up a fight. Some sellers might not feel confident about fighting the auctioneer, and give in.

(And it sounds like your EA might not want a fight either, perhaps to avoid spoiling their business relationship with the auctioneer.)

I've hijacked this threat, so started a new one for my case, thanks for the pointers. I have found the same T&C's via a Google Search and put my understanding in the thread.