We are really excited to be able to offer a quick, easy alternative means of selling property via the Modern Method of Auction. Traditionally a market limited to cash ready investors, the Modern Method has evolved auctions to be inclusive to a wider variety of buyers and sellers. Namely, it offers fixed yet realistic timescales (an average 28-56 days) to accommodate the typical residential buyer looking to arrange a mortgage. With the Modern Method, the successful buyer can reserve their property until exchange of contracts. This allows buyers and sellers alike the time to arrange their finances and carry out due diligence.
Modern method auction (also known as the “Conditional” method)
This offers the speed, transparency & security of a traditional auction but with more flexible timescales of up to 56 days to complete. This enables more open market buyers to purchase with a mortgage rather than restricting to investors only. As the buyer commits to purchase through a non-refundable reservation fee & agreement there is more security through the process.
Traditional method of auction (also known as the “Unconditional” method)
This is typically more suited to vacant properties or those not suitable for a mortgage as they don’t meet lender requirements. Therefore, market is limited to only cash and investment buyers. This method gives complete security as the buyer pays a 10% deposit at the end of the auction alongside an exchange of contracts with up to 28 days to complete.
We will discuss and agree a Reserve Price- this is not disclosed to the buyers and the property will not sell for any less than this amount. We will also agree a starting bid, which tends to be lower than actual market value to generate maximum interest and competition for the property.
You will need to complete a property questionnaire to facilitate the preparation of an auction pack. This provides all the information the buyer needs to make a decision, including:
The auction pack costs £395 (incl. VAT) if you also go on to use Medway Law conveyancing, (highly recommended by the auctioneers) services for the sale of the property. They specialise in auction packs and are experienced at delivering them within 14-21 days, giving advice along the way of any issues which could be resolved ahead of the auction. Alternatively, if you choose your own conveyancing provider, the cost of the auction pack is £445 + VAT. This is payable to the auction house and only due if the property sells. There are 0% agency fees for the seller to pay as they are payable by the successful purchaser.
Sandersons will prepare all marketing particulars as we would for a private treaty sale with professional photographs by our in house photographer, floor plan (with room dimensions) and can arrange an Energy Performance Certificate (if required).
Once you have approved our marketing particulars, the property will be listed for sale on our website and ALL the major property portals. This enables us to generate maximum interest, exposure and viewings while the auction pack is being prepared. Because of the level of interest in the properties (based on the pricing strategy mentioned above) and often shorter timeframe for marketing, block viewings at set times are more common with this method of selling. They also create a heightened sense of competition
Following a viewing, all prospective buyers will be contacted by the auction team to discuss feedback, interest in bidding, registration on the bidding platform and answer any queries relating to the process.
Once the auction pack is completed, the property can go to auction and bidding can begin. Auctions can take place in-room (a set date and time) or online (with an agreed start/end).
Interested parties can bid online or over the phone via the auction portal. The online system allows buyers to view the current bid, the amount of bidders and a live countdown to the end of the auction. They can enter your bids manually or use the ‘Maximum Bidding’ function, allowing buyers to set the minimum and maximum price you’re willing to spend and they will bid on your behalf.
Please note, unlike other online auctions we are familiar with such as eBay, there needs to be a clear 2 minutes with no bids at the end of the auction before it is closed. E.g. if you were to place a bid in the last minute of the auction, 2 minutes would be added to the clock and that keeps going until there is a full 2 minute period with no further bids. Therefore, if buyers leave it until the last minute to bid it won't necessarily play to their advantage.
Modern Method - The successful buyer will be required to pay a Reservation Fee/Deposit and sign a Reservation Agreement. The property is then reserved exclusively to them and they are required to unconditionally exchange contracts and complete the transaction within 56 days.
Traditional Method - Contracts are exchanged immediately, with completion taking place within the next 28 days. Complete security is provided but this method is more suited to cash investors. The auction team will require a 10% deposit paid on a non refundable basis and in some cases a reservation fee as well.
The buyer will need to instruct a solicitor to act on their behalf, we can support them with recommending companies who specialise in these types of transactions. The sales file will be passed to the auction Sales Progression Team who will keep all parties up to speed and help your sale progress within the required timescales.
The reservation fee is non-refundable and paid in addition to the agreed purchase price and is later used to cover the seller’s fees. The Reservation Deposit is paid in the instances that the seller agrees to pay the fees. It is non-refundable and forms part of the agreed purchase price.
If the reserve price is not met during the auction, the auction team will still communicate with the seller and any interested parties to see if a sale can still be achieved.