W H Brown ''modern property auction''

diane***

a property i am looking at is described by W H Brown as ''modern property auction''   valued at £140,000  welcomes bids  no conclusion date to the auction. 
  A non refundable deposit is required at 4.2% and a £300 fee. I am going to view next Saturday , i would normally make an offer but i don't want to lose money or run in to difficulty , i really want the property, the ''deposit''  is not considered part payment towards the price of the house but in addition to it.
I want to know what the deposit is on and where it goes?  if the seller withdraws do i lose the ''deposit''  , it is clear the deposit is not on the property.  Given this deposit is going to be near £6000 for me i am wondering what rights i have, it is ''non refundable''  , so once paid to W H Brown it's gone, secures me nothing as far as i can see . 
 I don't understand this way of buying a property, i do want the house so i am trying to understand, it doesn't seem to be advantageous to me the buyer.   
Can anyone help wade through the pitfalls please.

youth_leader

I've done some reading up on 'modern auction'.  The non refundable deposit is split between the auction house and the estate agent, I understand many estate agents use Iamsold.  The advantage is to the seller using this method, who pays minimal fees. 

ThePants999

Modern method of auction is frankly advantageous to nobody except the estate agent and auctioneer. But if you really want this specific property, you may not have a choice.

No, you don't lose the deposit if the seller pulls out, but that's pretty much the only scenario in which you get it back. You're expected to have done all due diligence before you bid, so if something comes up after the auction such that you want to back out, you'll lose the deposit.

SpiderLegs

It’s not a deposit, it’s a fee.
essentially you will be paying this fee regardless of whether you end up owning the property or not.

You are right that is in no way advantageous to you. Or to the seller. Only to the agent.

My advice would be to look elsewhere rather than get dragged into this type of rip off.

https://forums.moneysavingexpert.com/discussion/3090250/modern-auction-method/p1

diane***

thanks, so the £6000 is me paying the auction house and the fees of the estate agent for the seller, there are no surveyor documents or legal pack to offer any security , feels like a winner for them not me.  Thanks, i do want the property very much , sod it,  this looks like a deal breaker though, i don't have £6000 extra to pay for nothing , sod it again.
also........thanks spidelegs, just followed the link , it was insightful , i guess i better carry on looking. 

eddddy

diane*** said:

thanks, so the £6000 is me paying the auction house and the fees of the estate agent for the seller.  feels like a winner for them not me.  Thanks, i do want the property very much , sod it,  this looks like a deal breaker though, i don't have £6000 extra to pay for nothing , sod it again.
i could cry.

If you want, you can try the following...

Make your offer in writing to the EA, saying that you are not prepared to pay the 'reservation fee' or other auction / estate agency fees, so any fees would need to be paid by the seller.

And ask the EA to confirm that they have put your offer to the seller. (It's usually illegal not to pass on offers to the seller, but the EA might have persuaded the seller to sign a waiver.)

The seller's auction contract will say that they have to pay the £6k in these circumstances. So it's up to the seller to decide whether to accept your offer and agree to pay the £6k, or proceed with the auction.

Scotbot

Yep you are paying £6000 in estate agents and auction  fees instead of the buyer. Plus the 140,000 is the guide price which is usually 10%  below reserve. So the property will cost you £160,0000 and if anything comes up on the survey or searches you lose £6000 if you pull out. Usually the sellers are in financial difficulties. Unless 160,000 is a complete bargain you should buy another property.

NameUnavailable

As above the guide price will almost certainly be below the reserve price. However, there's nothing stopping you from putting in a lower offer. If you're the only person to offer they might accept it.