Modern method of auction solicitors in Devon and Somerset
In an earlier article conveyancing partner Steph Cleak looked at the pros and cons of buying and selling property at auction. In that piece, which you can read here, she touched upon the new modern method of auction. There has been much interest in the subject, so here are some more details on the new modern method.
Most modern method auctions take place online over a fixed period of time, with the auctioneer inviting bids for your property via a bespoke platform.
At the end of the fixed period the winning bidder pays a reservation fee, which usually equates to 5% of the purchase price. The buyer then has a specified period to enter into and exchange of contracts, usually 28 days, with completion to take place a further 28 days later.
Until contracts are exchanged there is no obligation on the purchaser to proceed. Either party may change their mind, though if the buyer pulls out they will forfeit their deposit.
Prior to the auction commencing the seller’s solicitors prepare a pack of legal information which is then presented to prospective bidders.
The modern method of auction, is popular among sellers as the process is faster than a conventional sale and has a strict timetable.
While there is less certainty than with a traditional auction, the fact that the buyer will lose their reservation fee if they don’t proceed means that the chance of the transaction falling through is significantly lower than with a conventional sale.
The biggest drawback for a seller however is the price that they receive for their property. Because fewer buyers will be able to proceed via the modern method auction, market forces will dictate that the price is likely to be lower. For example if the buyer needs to sell their own property in order to proceed then this method will probably not suit them. Similarly, if they need a mortgage then it is likely to present issues, though a bridging loan may help.
How we can help you
If you are looking for experienced modern method of auction solicitors in Devon and Somerset then give us a call or send us an email.
Where you are selling then we can prepare the legal pack. It is important to bear in mind that the information provided must be accurate and you can be held legally responsible for any errors. It is therefore vital that this task is carried out by experienced solicitors you can trust to get it right.
Contact us on 0333 888 0404 or send an email to us at [email protected]