Auctions And How They Work

Auctions and How They Work

There are two types of auctions.

Auction rooms

Modern auction

An auction room requires you to be present in the room, or via a phone, and you will keep bidding, just like they do on Homes Under the Hammer.

A modern auction is done online, and it works a bit like eBay. You put your bid forward and if someone outbids you, you keep putting your bid in until you have reached your budget.

You will know which one it is you are going to as the agent will tell you.

With an auction room you can attend and bid, ring up and bid or put a silent offer in.

Costs

There are upfront fees involved in an auction so always check the legal pack to find out what they are. This covers the auctioneer’s fees, online advertising costs, legal pack and solicitor fees. If you pull out of the deal, you will lose that fee.

For an auction room, you will normally pay around £6,000 for the upfront fees and once the final bid is in and the hammer has come down and you have won, you are required to put down 10% of the purchase price there and then.

For a modern auction, it’s normally around 3% upfront fees and 10% of the purchase price.

Timeframes

In an auction room, you will have 28 days from the moment you pay your 10% security fee to complete.

An online modern auction, you have 28 days to exchange on the purchase, pay your 10% fees and then a further 28 days to complete.

Due diligence

Always run your numbers with an auctioned property. Make sure you know what your maximum bid is and then you can always ring up the auctioneer and put your offer in.

Legals

All properties will have had their searches and services carried out. Try and send the legal pack to your solicitor before going to the auction or putting a bid in as they can check it over.

Always check the legal pack and seek advise from the auctioneers on exact fees and terms.

Your coach & trainers

Mark & Trisha Harvey

Real Life Group