Modern auction

Doozergirl

Worzel51015 said:

julicorn said:

Worzel51015 said:

Surely only the fees are only paid by winning bidder and if the vendor completes

"The modern method of auction means that upon the acceptance of an offer or at the close of the auction, the successful buyer must place a non refundable reservation fee to the agents to reserve the property."

This article also says:
"If the property falls through due to the Vendor, the reservation fee will be refunded to the buyer in full. If the sale falls through due to the Buyer, it is non-refundable." - not sure what 'due to the vendor' really looks like in practice, beyond simply pulling out. 

But can the vendor choose not to accept the winning bid (reserve met) and go with a lower bidder because they prefer them? Therefore not honoring the auction process.

Yes.  Because it isn't really an auction.

It's so crap a system, it's unbelievable.  

I have been a buying agent for a client that waited 10 months with £6,000 of their money just sitting with the agents, waiting to buy.  Turns out that the 'vendors' weren't even in the legal position to sell.   Successfully pulled out of that with no argument and got a full refund, but it's terrible.  They're just taking advantage of vendor and purchaser.  

They prey on vulnerable vendors, frankly.  

Worzel51015

Thank you for all the comments so far, it's really appreciated. 

Scotbot

If you are the winner you have to pay the fees within 24 hours. If you do a survey and it shows problems and you want to pull out  or there is any legal hold up and you can't complete within the specified time, usually 56 days, you lose your fees. Typically 6k. You have to be either stupid or not afraid of losing 6k  to buy via modern auction. 

Worzel51015

It seems so. Its more the fact that a winning bid doesn't tie seller to honour it. 
Problem is estate Agents seem to be  pushing this method as their preference,  at least  in my area,  and when not they are controlling who's offers are accepted or put to vendors depending  whether you are using their  add-ons  (mortgage, conveyancing erc) I see this is  the method the.much advertised  'Strike' rely on for their fees.
Whole system needs proper regulation and transparency IMHO.

eddddy

Maybe it's worth mentioning....

You're still free to make an offer on the property outside the auction, making it clear that you are not prepared to pay any auction fees - it might be best to do it in writing, to avoid misunderstandings.

You can make your offer direct to the seller.

You can also make your offer to the EA on those terms. In general, EAs are required by law to forward all offers to the vendor - but it's possible that the auctioneer/EA got the vendor to sign a waiver saying they don't have to forward offers where the buyer won't pay the auction fees.  (And the EA will try to push you back, so you'd need to be firm.)


The downside is that if the seller accepts your offer, they will have to pay the auction fees.  But the benefit to you is that there's no risk of you losing the fees if the sale falls through.

Worzel51015

Funnily enough I did this early on when I saw the name of vendor. I know them vaguely through someone else who I asked to check they were happy for me to contact them first.
They said EA told them auction was best for them but they didn't know if they could sell outside of it and would check. Seems they were given a load of blarney as they didn't come back to me and it now seems auctioneer is trying to make out a lower offer cash buyer is better.

Worzel51015

Plus I doubt
any vendor will agree to pay the auction fees over the seller.