Auction House Sale Query

i3orny

In early February, my wife and I enquired about a house purchase. We were told from the estate agent that the property had been listed with an auction, but had not sold and the vendor was removing it from the auction and selling it directly through the estate agent. We later learnt this is exactly what the vendor did.

A month or so passed, and my wife and I decided to pursue our interest and view the property. We loved it, and subsequently wanted to make an offer, at which point we were told that because we enquired whilst the property was at auction, we would have to deal with them direct. This also meant we would have to pay a buyer's premium to the auction house on whatever deal we could agree with the vendor. And, subsequently, the buyers premium is making the house unaffordable for us and our offer has subsequently been rejected by the vendor, however we're lead to believe the offer would be acceptable under normal estate agents terms.

I'm looking for some advice. I don't see how, because enquired about a property in early Feb, a few days before the sale was taken away from the auction, that we are liable to this buyer's premium which is ultimately blocking us from agreeing a deal on the property. As far as we are concerned, we spoke to an estate agent about a property. That property was listed on the estate agent's website and we ourselves never spoke or enquired with the auctioneers themselves - only ever the estate agency. By the time we arranged the viewing, the house was no longer for sale with the auction and it was the estate agency themselves who subsequently viewed the house with us. 

However, when we have come to agree a deal with the vendor, it is the auctioneers we're being pushed to deal with - only on the basis we enquired a few days before the auction ended - who of course come with the buyer's premium that otherwise would form part of our offer to the vendor and from our understanding, make it acceptable

I hope that makes sense and would welcome any advice. 

greatcrested

What dealings did you have with the auction house back in Feb?

What did you sign at that time?

davidmcn

I'm not sure there's much more useful advice to be given - you've been told the terms on which the vendor is prepared to sell to you (which they're presumably stuck with because of what they've signed up to with the auctioneers/agents), you've offered a price which (presumably) was the figure you first thought of minus the buyer's premium, they've told you that's not enough. Tell them the offer is still on the table (if you want it to be), and move on.

eddddy

Are you really talking about a "buyer's premium", or is it a "Modern Method of Auction" with a "reservation fee".

FWIW, you can make an offer saying that you're not prepared to pay the fee - but it's best to put your offer and terms in writing, to avoid any confusion.

The law says that an estate agent must pass on all offers - unless the estate agent was sneaky and got the seller to sign a waiver, saying that offers without a fee don't have to be passed on.

But typically, the contract the seller signed with the auctioneer will say that if they sell to somebody who doesn't pay the fee, the seller has to pay the fee instead - so it may not make too much difference. (Except that if the sale falls though you don't lose the reservation fee.)

steampowered

The T&Cs which the vendor agreed with the auctioneer will say that the auctioneer's fee is payable if the vendor sells the property to someone who bid on it.

That's entirely reasonable - otherwise people could just avoid paying the auction fee.

That's why the vendor is making you deal with the auctioneers. I can't see any way around that I'm afraid. If you can't afford the fee then you'll have to buy a different property.

Chandler85

They didn't bid on it though, at least from how I read it.

The issue seems to be around the good old introducing the buyer to vendor clause.  As the potential buyer enquired while it was till up for auction, the auctioneers are claiming that they introduced the buyer to the vendor so they are liable to pay their fee.  Sole selling rights and all that.