Properties sold by Modern Method of Auction off-putting?

[snowspider]

However attractive a property looks, the words modern method of auction give me a sinking feeling. Am I just old-fashioned? The costs look high to me and just puts me off.

This type of thing

www.rightmove.co.uk/properties/78751787

I have bid before in actual property auctions and for the right property would do so again, although they are now online but this modern method business just confuses me.

Has anybody done it as buyer or seller? I can see we have to put up with all sorts in the current market/times, such as proof of funds before even getting a viewing, fastest finger first for seeing the hottest properties, sealed bids, gazumping etc but I don't think I could cross into the Modern auction territory.

Wouldn't touch it with a bargepole. You are basically paying the EAs fees whether the sale goes through or not. It's a con!

Yup, I wouldn't get involved.

Also the price change history on that house is interesting... :

05/07/2021 Price changed from £365,000 to £300,000
16/09/2020 Price changed from £550,000 to £365,000
24/08/2019 Price changed from £575,000 to £550,000
21/01/2019 Initial entry found: £575,000

My first thought whenever I see for sale by auction is unmortgageble -> major structural or legal issues -> bargepole (irrespective of how shiny and new the house looks!)

I hadn't seen the price changes! May be that they are selling it now without land or something similar? Obviously I don't know if that is the case.

The Buyer's Premium doesn't seem to do buyer or seller any favours, I would have thought.

Same here, wouldn't go anywhere near it. Shame as I also saw a lovely house and no idea why on earth sellers thought it was a good idea!

We loved a house being sold this way but firm pass because of the mad fees. It actually never sold this way and eventually came on the market the usual way

Our estate agent at our former house encouraged us strongly to go with this method of selling our home. They really talked it up. After going through the T&Cs with a fine tooth comb, I can see why. No one really benefits but the agent, but it's presented in such a way that makes it seem appealing to the seller.

The seller is essentially sold the idea that it's like Ebay and there will be a sea of buyers who are competing against each other, driving the auction price up. Essentially you're told that because of the competitive element you could achieve above and beyond what you'd otherwise have set as the list price at AND have no agent fees, as the buyer pays them (at a much higher % than you'd be paying them as the seller)

In reality, as above, most people don't want to get involved in such a thing if they have any other choice so you restrict your pool of buyers more than anything.

I sold my old house via MMA. It was structurally sound but in need of total modernisation - so I knew my market was investors. It was coding me money in mortgage/insurance/council tax each month so I wanted it sold quickly. It actually did go into a bidding war, and it achieved £16k more than the very top of what I thought it might sell for

There's no way I would put a 'normal' house up for sale using the method. Your pool of buyers is much smaller as the huge fees put people off. Essentially they have to pay them even if they find out the house has major subsidence or awful neighbours etc. Too much of a gamble for most people.

@Touloser

My first thought whenever I see for sale by auction is unmortgageble -> major structural or legal issues -> bargepole (irrespective of how shiny and new the house looks!)

Yep. I ignored anything that was for sale by any form of auction. Not worth even looking at the floor plan.

@saggymaggie

Our estate agent at our former house encouraged us strongly to go with this method of selling our home. They really talked it up. After going through the T&Cs with a fine tooth comb, I can see why. No one really benefits but the agent, but it's presented in such a way that makes it seem appealing to the seller.

The seller is essentially sold the idea that it's like Ebay and there will be a sea of buyers who are competing against each other, driving the auction price up. Essentially you're told that because of the competitive element you could achieve above and beyond what you'd otherwise have set as the list price at AND have no agent fees, as the buyer pays them (at a much higher % than you'd be paying them as the seller)

In reality, as above, most people don't want to get involved in such a thing if they have any other choice so you restrict your pool of buyers more than anything.

What fresh hell is this? And what kind of person would want to buy a house on the equivalent of eBay?

No no no. We’ve just sold and bought and I ruled out even enquiring about anything that was for sale via this method. It all just seems a bit…shady.

I've ignored all these. I can see a specific hard to sell house has now switched to this. It's still languishing.

@FurierTransform

Also the price change history on that house is interesting... :

05/07/2021 Price changed from £365,000 to £300,000
16/09/2020 Price changed from £550,000 to £365,000
24/08/2019 Price changed from £575,000 to £550,000
21/01/2019 Initial entry found: £575,000

Where can you find this information about pricing?

We avoided all auction properties, which is a shame as some of them were lovely!

I was also interested in the pricing information, is it a browser extension or an app. I know there used to be Propertybee (sic) but never used any of these.

It sounds like MMA is not very attractive to buyers or sellers from this.

Though maybe non risk averse investors snap up bargains despite the fees, because other people aren't biting?

I hadn't seen the price changes! May be that they are selling it now without land or something similar?
It looks like it previously had two other cottages with it, see:
www.zoopla.co.uk/property/mayfield/lower-freystrop/haverfordwest/sa62-4et/20803442/

www.zoopla.co.uk/property-history/mayfield/lower-freystrop/haverfordwest/sa62-4et/44765722/

Yes, MMA seems to be a win for the agent!

What actually is the 'modern method of auction'?

Thank you that's interesting.

I think I shall adopt the description, "wild but tamed and vibrant garden" for ours

The Modern Method of Auction seems to be bidding online and if successful paying a large buyer's fee to secure the property (thousands of pounds) and then going through to exchange within a time limit. The reservation fee is non refundable

and extra to the purchase price

going through to exchange within a time limit. The reservation fee is non refundable

So unless you have cash to buy it you're taking a chance that your sale will complete within the time limit, or you'll lose the reservation fee. Given how many delays there always seem to be during a house purchase that puts me right off, even though I am looking for a house that needs a lot of work and they're what the MMOA seem to favour.