Property auctions have been soaring in popularity over the last few years. Made famous by the iconic BBC TV show “Homes under the hammer” property auctions have always made up a large part of housing sales. In keeping with advances in technology, many property auctions have now moved online, which has proved timely with the advent of COVID19 and the restrictions that have accompanied it.
How do online property auctions work?
We work with renowned property auction experts Whoobid (link) for all of our online auctions. There are two types of online property auctions, the traditional auction, and the modern auction.
- Property is listed online and advertised with a guide price that is an indication of a seller’s minimum expectations and the reserve price is not usually in excess of 10% above the guide.
- Buyers can register free of charge to receive the auction pack – the legal documents including searches.
- Bids that are placed are legally binding and if you are the successful bidder at the end of the auction, the buyer’s fees will automatically be taken from your chosen account, and contracts are exchanged, you then have 28 days to complete the sale. The buyer’s fee of 2.5% plus VAT is payable on top of the winning bid.
- The modern method auction is very similar to the above but contracts are not exchanged at the end of the auction.
- It does however grant the buyer exclusivity to buy the property at the winning price and exchange contracts within 28 days, with completion normally 28 days thereafter. This option gives buyers more time to organise their finances so is helpful for less experienced buyers or those needing to raise a mortgage.
- The buyer’s fee is the same as above, 2.5% plus VAT on top of the winning bid.
There are many advantages to buying and selling using online property auctions.
A fixed timeline:
For those with time constraints, looking for a quick sale, or those worried about their property sitting on the open market, an online auction can be very advantageous. There is a definitive time limit on the sale and after the auction takes place the formalities of the sale can be processed quickly.
Apart from the cost of preparing the auction pack, normally £299 inc VAT, the seller pays no commission ass that is paid by the purchaser, as detailed above.
High completion rate:
Our partners Whoobid have a fabulous 95% completion rate, and we ourselves have had 6 extremely successful online property auctions!
No gazumping or gazundering
With an online auction you don’t have to worry about gazumping (a seller agrees to a deal with one buyer only to change their mind at the last minute when a higher offer comes in) and gazumping (a buyer lowers the offer they have made to the seller of a property, typically right before the exchange of contracts. If a seller is particularly eager to sell, they may feel forced into accepting this lower offer rather than trying to find new buyers). A guide price is set and bids are made accordingly, in real-time, either online or in a partner agent’s branch.
If you would like to find out more about selling your property online give our friendly team a call on 01666 825725