Selling via auction

eddddy

Beenie wrote: »

I will look out for 'modern method' and see what are the pitfalls.

The major pitfall is that the buyer has to pay a large fee to the auctioneer - it's often a minimum of £6k, and could be upto 5% of the purchase price.

(That fee goes straight to the auctioneer as a reservation fee, the seller doesn't get any of it.)

So the downsides are...

• That tends to mean people bid £6k or 5% less than the property is worth to them.

• The £6k or 5% can't be added to the buyer's mortgage, so FTBs with just a 10% deposit (needing a 90% mortgage) etc, won't be able to bid.

• If there's a problem, and the buyer pulls out, they lose their £6k or 5%. So some buyers will not take the risk of buying at this kind of auction.

• This type of auction isn't really feasible for a buyer with a chain below them. So you might be limiting your market to FTBs and/or people with no property to sell.

But I guess the upside is...

• Having won the auction, the buyer would lose their £6k or 5% if they pull out of the purchase, so they are much less likely to pull out for a frivolous reason

Rosco62

Stick with estate agents

PasturesNew

I am looking for "a lovely little bungalow".

I'd not even investigate one that had "modern auction method" in its description.

It's the quickest way to put off real potential buyers.

NewShadow

Beenie wrote: »

There are three executors involved and all need to agree. I don't think there's any rush as probate hasn't even been applied for yet, and that can take 1-2 months at least.

I will look out for 'modern method' and see what are the pitfalls.

Edit: No Matches Found

See if these help?

Buyer not instructed solicitor

Property Auction Fee's and Calculations

Estate agent(purplebricks) Letter of Administration?

Auction - questioning guide price

Price drop - from post 14

'Modern auction method'

davidmcn

Beenie wrote: »

There are three executors involved and all need to agree. I don't think there's any rush as probate hasn't even been applied for yet, and that can take 1-2 months at least.

I will look out for 'modern method' and see what are the pitfalls.

Edit: No Matches Found

Not sure how you managed to get no matches. Sometimes easier though just to use Google to find things on the forum.

Slinky

davidmcn wrote: »

Not sure how you managed to get no matches. Sometimes easier though just to use Google to find things on the forum.

Easy to get 'no matches found' if you forget to scroll down to search on Forum rather than the main site.

Beenie

NewShadow, that is the most useful and interesting set of links. Many thanks.

There is a solicitor involved in Probate by the way. Don't know if this speeds up the process or not. I did my late sister's on my own and it took 8 weeks. Deceased FIL had a solicitor and it was done in 4 weeks.

Katgrit

If I saw a property I liked and phoned the agent to book a viewing and got told it was for sale by modern method of auction I'd just hang up the phone and think "Ah well, never mind". I just wouldn't touch it with a barge pole even if it was my dream house. It benefits no-one but the agent, and puts the buyer at a distinct disadvantage.

zagubov

Is the property leasehold? And partially submerged in a floodplain over-run with Japanese knotweed? On the site of a former radium factory?

Because the Modern Method of Auction may well sound about as attractive to buyers as these other features

AdrianC

Another vote here for "somebody else's bargepole" with MMA.

If you want to get a good return, and think it'll sell easily, just market it normally.
If you want to get shot, or think there may be issues, a proper auction.

MMA is neither fish nor foul, and is simply a way for the EA to make a bit more money at the expense of putative buyers.