Are you sick of your property not selling, or sales falling through?
The traditional route to property purchase is to submit an offer to an estate agent based on the sale guide price. There is, normally, a period of negotiation until a final price is agreed.
This is not the end of the process, as until you exchange contracts the buyer is free to change their mind about their offer without any financial penalty. Sometimes this is because of genuine reasons, sometimes they have been holding out for a different property, using yours as the back-up option. Either way, a buyer that pulls out of a sale has wasted several weeks of time, where other potential buyers may have moved on from your property.
It’s frustrating, but it can be avoided!
Introducing The “Modern Method of Auction”
The modern method of auction process is increasing in popularity amongst estate agents and sellers.
This is known as a conditional auction and must not be confused with the traditional method of auction. It basically means that upon acceptance of an offer (or indeed at the close of the auction if the property is being sold via an auction house) the successful buyer is obliged to pay a reservation fee to the agents which reserves the property.
This fee covers the estate agents’ fees which differs from the traditional auction or sale approach where the seller pays the agents fees.
If the buyer pulls out of the sale, this fee is non-refundable, whereas if the vendor is the one pulling the plug, the reservation fee will be refunded to the buyer in full.
The modern method offers the following advantages:
- Secure way to sell – the buyer is financially committing to purchase the property and is unable to walk away without penalty;
- Swift to sell - after agreeing the sale, the buyer has 56 days to complete the transaction with an exchange targeted within 28 days;
- Higher sale prices - highly competitive and transparent online bidding can lead to increased sales results; we have seen some properties achieve 20% over the advertised guide price;
- Lower seller fees – As the buyer pays for the agent commission, the only cost of sale is for the auction pack.
Because of the ability to secure a sale in a much shorter timeframe than a traditional sale, this may appeal to sellers with a vacant property where conveyancing issues and sluggish buyer attitudes affect the process.