Auction, the modern method
by Stephen Roe
Auction. This is normally a word people do not want to hear when discussing selling their home. Why? “you do not get market value for your property” or “I cannot set a reserve price.” Maybe with the traditional method of auction but how about the modern method of auction.
Below I have taken a look at the modern method of auction, it gives the vendor control to set a reserve and achieves great values for homes when selling.
Comparing the modern method of auction to traditional auction: which is better for you?
There are a few key ways in which the modern method of auction differs from a traditional live auction. First, with the modern method, there is usually a Reserve Price set by the seller. Secondly, bidders must pre-register and provide proof of funding prior to bidding; this ensures that only serious bidders are involved in the process.
The modern method of auction usually has a Reserve Price set by the seller, while in a traditional live auction there is no such price.
It’s no secret that the process of buying a home has changed drastically over the years. One of the biggest changes has been in how homes are bought and sold at auction. In a traditional live auction, there is no such thing as a reserve price set by the seller. The modern method of auction has a Reserve Price set by the seller. So, what’s the difference between these two methods? And which one is better for buyers and sellers? Here’s a quick rundown of each method:
Traditional Auction (Unconditional)
In Traditional Auction transactions, exchange of contracts takes place as soon as the auction ends. The buyer is required to pay a 10% deposit at the point of exchange and must complete within 28 days. This is the most secure and the fastest method of sale; however, it can limit interest to cash and investment buyers only.
- It is usually more suited to vacant properties, or those not suitable for mortgage lending. It provides complete security as exchange takes place at the end of the auction with a fixed timescales of 28 days to complete
Modern Method of Auction (Conditional)
Combining the best of both Private Treaty and Traditional Auction. Offering the speed, transparency, and security of a Traditional Auction but with an extended completion timeline of within 56 days. This extended timescale makes auction more accessible to a wider range of buyers including mortgage and first-time buyers, helping to generate a greater level of interest for a property.
- This method offers quick but more flexible timescales of 56 days to complete. More flexible timescales allow interest from first-time and mortgage buyers as well as investors. Security for both buyers and sellers through a non-refundable Reservation Fee and Reservation Agreement
In the modern method, bidders must pre-register and provide proof of funding prior to bidding; this ensures that only serious bidders are involved in the process. In a traditional live auction, there is no such requirement for bidders.
Auction methods have come a long way since their inception, and the modern method of auction is much different than the traditional live auction. In the modern method, bidders must pre-register and provide proof of funding prior to bidding; this ensures that only serious bidders are involved in the process. This wasn’t always the case though – in a traditional live auction, there is no such requirement for bidders.
Why you should always get a property valuation before auction.
Why you should always get a property valuation before auction. When considering selling a property at auction, it is essential that you get a property valuation first. A property valuation will give you an idea of the true market value of the property, as well as any potential problems that could affect its value. Auction houses are often keen to sell properties quickly and for the highest possible price, so it is important to be aware of the true value of the property before selling.
Book your free valuation with you Roe & Co Residential Sales. Click here
What are the fees involved?
In the modern method of auction there is usually no fee to pay upfront and its the buyer who pays your auction fee. There is an auction pack fee of £445.00 including VAT, however this is only payable by you if your property sells.