Firstly it is important to emphasise that as a client you have a choice of auction routes available to you.
When we talk about “auction” many individuals will have a perception in their mind of what that means.
Traditional auctions (unconditional sales) still offer the most security to sellers. That won’t change. Once the gavel falls a legal contract is formed, and the buyer is obliged to pay a non-refundable 10% deposit immediately. Completion usually takes place within 28 days. The buyers are legally committed to the purchase and cant pull out of the transaction. It also offers a real speedy conclusion to the property sale.
With this method of auction, the buyer is given a more realistic time frame in order to source funding and complete the purchase. With a traditional auction, the buyer is given 28 days, with a modern auction, the buyer has 56 days – 28 days from the day of the auction to exchange contracts, then a further 28 days to complete the purchase in full.
This gives buyers more time to have funding sorted, if they are reliant on a mortgage, as you don’t have to exchange contracts on the same day.
When a successful bid is made, the buyer is required to pay a non-refundable ‘reservation fee’ in order to secure the property – this can be up to 5% of the purchase price.
The reservation fee can be refunded but only if the sale cannot be completed due to a fault from the vendor. If the buyer pulls out before exchange of contracts, the reservation fee will be lost and the vendor can resell the property.
With this method of auction, the buyer is given a more realistic time frame in order to source funding and complete the purchase. With a traditional auction, the buyer is given 28 days, with a modern auction, the buyer has 56 days – 28 days from the day of the auction to exchange contracts, then a further 28 days to complete the purchase in full.
This gives buyers more time to have funding sorted, if they are reliant on a mortgage, as you don’t have to exchange contracts on the same day.
When a successful bid is made, the buyer is required to pay a non-refundable ‘reservation fee’ in order to secure the property – this can be up to 5% of the purchase price.
The reservation fee can be refunded but only if the sale cannot be completed due to a fault from the vendor. If the buyer pulls out before exchange of contracts, the reservation fee will be lost and the vendor can resell the property.