Auction scam?

342church

I viewed a property which I then found out was to be auctioned. I did not register to bid or make a bid. The auction closed with the property unsold and the seller then removed it from the auction. I contacted the seller for a private sale. The auction house has said if it sold tome within a year we will be liable yo £25000 auction fees. Is this correct

Emmia

342church said:

I viewed a property which I then found out was to be auctioned. I did not register to bid or make a bid. The auction closed with the property unsold and the seller then removed it from the auction. I contacted the seller for a private sale. The auction house has said if it sold tome within a year we will be liable yo £25000 auction fees. Is this correct

It will depend on the contract the seller has with the auction house, essentially if you saw the property on the auction house' website, and they'd argue that they "introduced you" to the seller. 

Estate agents often have similar clauses in their contracts.

NameUnavailable

Yes the auction co (who promoted the sale) will have a clause in the contract to entitle them to fees if the property sells within X months from the auction date. Not a scam.

Slinky

You say you viewed the property, who arranged the viewing?

eddddy

342church said:

I viewed a property which I then found out was to be auctioned. I did not register to bid or make a bid. The auction closed with the property unsold and the seller then removed it from the auction. I contacted the seller for a private sale. The auction house has said if it sold tome within a year we will be liable yo £25000 auction fees. Is this correct

There are 2 main angles to this...

Firstly...

You only have to pay a buyer's fee to the auction house, if you entered into a contract agreeing to pay that fee.

So, for example, when you arranged the viewing, were you given any written t&cs; or see t&cs on their website; or were you told any t&cs along the lines of "By attending this viewing, you agree that you will pay a buyers fee, if you buy..."?

If you weren't given/told any t&cs at any point, it doesn't sound like you've entered into a contract, so you don't have to pay.


But secondly...

The seller has signed a contract with the auction house. That contract probably says that, as the auction house introduced you, if the seller sells to you and you don't pay the buyer's fee, then the seller has to pay that fee instead.

(So when the seller finds out that they'll have to pay a hefty fee if they sell to you, they might change their mind and reject your offer - and/or ask you to increase your offer.)



So....

You can ask the auction house when and how they believe you entered into a contract with them.

But if you didn't enter into a contract with the auction house, you'll have to 'sit tight' and see what the seller does when they find out they have to pay a hefty fee, and see if they still want to sell to you.

Albermarle

In case the fee is payable one way or another, there is always the possibility to negotiate.

If the auction house insists on £25K and therefore no sale happens, they get nothing.
If they agree to say £10K and the sale happens, they get £10K.

342church

I viewed with an estate agent when they said it was an auction property I said I was not interested in auction - they said maybe the vendor will send off auction and so I agreed to view

eddddy

342church said:

I viewed with an estate agent when they said it was an auction property I said I was not interested in auction - they said maybe the vendor will send off auction and so I agreed to view

So it doesn't sound like you entered into a contract, so you don't have to pay.

So it's up to the seller to 'argue' with the auction house about paying the £25k.

So, as I say, you'll have to see how the seller reacts if the auction house tells the seller that they have to pay £25k fees.