Changing the perception of property auction
About Modern Auction
Modern Method of Auction (Conditional)
Our most popular auction method, 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
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 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
- Fixed timescales of 28 days to complete
How it works
BUYING AT AUCTION
Buying property at auction is no longer just for the experienced investor looking for their next renovation project, so if you’re looking for a new home there are some great benefits to buying at auction:
Speed: The Modern Method of Auction offers speed with a completion timeframe of within 56 days, allowing buyers to purchase with a mortgage. We offer completion timescales of as little as 28 days with our Traditional Method of Auction.
Security: Properties sold through iamsold have a completion rate of 95%, compared to the current 70% rate of private treaty sales. Our fee structure ensures commitment from the buying party, which in turn boosts the completion rate for properties sold. Furthermore, for the buyer, this structure removes the fear of gazumping – one of the biggest issues associated with private treaty.
Buy with a mortgage: Modern Method of Auction sales offer a 56-day completion timescale meaning you have time to organise your finances and arrange a mortgage. Traditional Method of Auction timescales of 28 days are best-suited to cash buyers as there is limited time to arrange finance.
Buyer Information Pack: We provide a comprehensive Buyers Information Pack with each property which is a collection of documents that help you make an informed decision before proceeding.
Transparency: We offer a clear and transparent process; place bids and view all activity online so you don’t miss out on your perfect property.
24/7 anytime, anywhere bidding: Our online platform allows you to bid 24/7, at a time and place that suits you . Alternatively, you can attend one of our nationwide live regional auction events.
SELLING AT AUCTION
Selling your property has never been easier with our Modern and Traditional Methods of Auction and there are some great benefits:
Complete Faster: On average, Private Treaty can take over 100 days to complete whereas auction provides fixed exchange and completion dates of between 28 and 56 days. This means you can plan your move more easily.
Security: With auction, buyers pay a non-refundable Reservation Fee or deposit to secure the property so all parties can move forward with confidence. A Reservation Agreement is also signed by the buyer, committing them to complete the purchase reducing the risk of a fall-through.
No Sale, No Fee: There is nothing to pay to enter your property into one of our auctions. There is an auction pack fee of £445.00 including VAT, however this is only payable by you if your property sells.
Optimised Exposure: An attractive starting bid increases interest and encourages competitive bidding between prospective buyers, which can help to drive up the final selling price of your property.
Reserve Price: We discuss and agree on an undisclosed Reserve Price with you in advance of the auction. This is the minimum amount you will accept for your property, providing you with additional security and peace of mind that comes from knowing you are fully in control of the selling price.
Q) HOW LONG DOES THE AUCTION LAST?
This can very much depend on the seller’s circumstances or the level of interest generated in a property during the Pre-Auction Marketing period. Properties may end up live for a matter of days through to a matter of weeks. We would highly recommend registering your interest against the property via the Watch List facility and making sure that you have viewed the property. Our Auction Specialists will keep all interested parties updated and should the vendor decide to end an auction, or accept a bid prior to the end of an auction, then they will communicate this. If we are unaware of your interest in a property it is difficult to communicate any changes in circumstance.
Q) HOW DO I PLACE BIDS?
Firstly, you will need to register with us and a link to the registration form can be found on the top bar of the home page. We would highly recommend doing this even if you are only initially ‘browsing’. Once you have completed the registration form, you will be sent a welcome email confirming that you are registered to bid and able to place bids online. Alternatively, you can call and speak to one of our Auction Specialists by calling 0345 646 0302 and they will be happy to place a bid on your behalf. We would recommend that you have viewed any properties in question and looked through the legal information supplied within the Auction Pack for each Lot.
Q) CAN I PLACE BID AT ANY POINT DURING A PROCESS?
Bids, or offers, can bid placed at any stage during an auction process. Even if the property is in “Pre-Auction Marketing” status, although you would need to consider that the Auction Pack has not been signed off. By law we must put any offer that is made forward to the seller. It is then up to the seller to decide if they want to consider the offer and take the property out of the auction early. In this scenario the Reservation Fee is still payable, and the Terms and Conditions of the auction still apply.
Q) IS THE BID BINDING?
In the Modern Method of Auction, the bid obliges you to pay a Reservation Fee and sign the Reservation Agreement to grant an exclusivity to the property. It does not bind you to buy the property but reserves you the right to exchange contracts and complete on the property at the agreed price within 56 days of draft contracts being received by your Solicitors. With the Traditional Method of Auction, once your bid has been accepted, or auction has been won, then you are required to exchange contracts and pay a 10% deposit alongside the Reservation Fee. Completion is generally expected within 28 days of exchange.
Q) HOW ARE YOU PAID?
This will depend on the terms that the vendor has chosen. Predominantly, the buyer pays a non-refundable Reservation Fee when the auction is successfully concluded. The fee is held by iamsold to reserve the property to the buyer and show their commitment to the purchase. It is later used to pay the Estate Agent and Auctioneer who work in partnership to provide the auction.
Q) WHY WOULD SOMEONE PAY A FEE TO PURCHASE A PROPERTY?
Usually, the vendor chooses for the buyer to pay the Reservation Fee as a sign of commitment and agreement to the auction terms. As the vendor does not have to cover this cost, they are aware that the buyer is required to consider this on top of a purchase price. Most vendors have decided to use the auction method due to past experiences on the open market or are motivated by security and speed of sale over potential price achieved.When looking to buy a property most people will look at a total purchase price with the fee included and all of the lots available through our online auction are priced realistically to sell. As the buyer, as well as paying the Reservation Fee you also sign a Reservation Agreement which provides commitment between yourself and the seller to complete the transaction, reducing the risk of a sale not completing. The seller is also bound by the same terms.
Q) WILL PAYING A RESERVATION FEE INCREASE MY STAMP DUTY LIABILITY?
Current HMRC policy is that the chargeable consideration (monies or monies worth) for a land or property transaction is what has been given (either directly or indirectly) in order to acquire the subject - matter of the transaction, by the purchaser or a person connected with them. This includes fees which have to be paid in order to acquire the property. This means that whatever the buyer pays, it will form part of the purchase price for the property and it will be included in their liability for stamp duty. In all circumstances we would recommend discussing this with your chosen Solicitors prior to committing to a bid.
Q) HOW LONG DOES THE AUCTION LAST?
Once an Action Pack has been completed and signed off, your Auction Specialist will discuss potential end dates for your property with you. This will be dependent on the level of interest created whilst the property has been in Pre-Auction Marketing stage (PAM). Your potential end date could be only a matter of days away if you already have several people wanting to bid. However, if there has not been any reported interest at this stage then your suggested end date could be set up to 3 weeks away. In short, the time that your property has a live timer is very bespoke to your situation. You can tell how much time is remaining on a specific auction by looking on the search section or by clicking into the property details where the time remaining will be displayed in the top left-hand corner.
Q) DO I HAVE TO ACCEPT THE HIGHEST BID FOR MY PROPERTY?
Not at all. Each property has an undisclosed Reserve Price, this is the minimum amount that you agree that you are willing to accept for your property. Only the Start Bid and any bids received are visible as the Reserve Price remains confidential. If the Reserve Price has been met, or exceeded, then you would be expected to sell the property at an end point agreed with your Auction Specialist. You can accept a bid at any point during the process and do not have to wait for an auction to time out should you not want to. Please note, should you decide not to proceed with a sale at or above your Reserve Price then you may be liable for any contracted fees.
Q) WHAT IS A STARTING BID?
With every auction there is a Starting Bid. This is the price published for each property and confirms the level at which the bidding is suggested to begin. Starting Bids are for guidance only, they are not the price that the property is being sold for. Each Starting Bid has a corresponding Reserve Price.
Q) WHAT IS A RESERVE PRICE?
This is the minimum price that you agree the property can be sold for. This figure is kept private and is not disclosed to interested parties, however as a guide the reserve is generally no more than 10% in excess of the Starting Bid. The ideal scenario is to generate enough interest to exceed the agreed Reserve Price, however, you must be comfortable should this be the highest achieved.
Q) CAN I ACCEPT BIDS PRIOR TO AN AUCTION ENDING?
Yes, if you want to accept a bid to sell your property before the auction has finished that’s fine. We are duty bound to put any offer for the property forward to you, so it is entirely up to you if you want to accept an offer and take the property out of the auction early. Your buyer will still be bound by the Terms and Conditions of the auction.
Q) ARE BIDS LEGALLY BINDING?
With the Modern Method of Auction; the bid binds the buyer to pay a Reservation Fee and sign a Reservation Agreement. It does not bind the buyer to buy the property but instead allows them to reserve the right to exclusively exchange contracts on the property at an agreed price within 56 days of the draft contracts being received by the buyers solicitors.
Q) WHAT IF THE RESERVE PRICE IS NOT MET?
Should an auction end with the highest bid being below your reserve, then your Auction Specialist will still discuss this with you and you could, if desired, accept this bid should you wish.Q) WHY DO YOU USE SOLE SELLING RIGHTS AGREEMENTS?This type of agreement is typical with properties to be marketed under auction terms. Sole Selling Rights means that the property can only be marketed and sold through iamsold and your Estate Agent whilst it is under contract, and this ensures all parties are able to proceed in the instance advised above. If the property was marketed under different terms by different agents then this is likely to damage your marketing and encourage buyers to avoid the terms, and commitment, that you have chosen as a seller for very specific reasons.
Q) A VIEWER HAS MADE ME AN OFFER PRIVATELY; CAN I ACCEPT IT?
It's important that negotiations are carried out by the Partner Agent and iamsold whilst you are under contract and there a number of reasons for this. As the seller you will become liable for the auction fees rather than the buyer due to the terms of the contract. Our sale methods are designed to provide commitment and security to both parties, and it is likely that you have chosen this method of sale for those specific reasons. Our aim is to help you sell your property so we will work with any interested party if they are unsure about auction, so that we can try and agree a sale for you.