Someone explain "modern auction" to me?

[DecisionTime123]

Sorry I am thick. Don't care who knows it. What does the text below mean?

"This property is for sale by Modern Method of Auction allowing the buyer and seller to complete within a 56 Day Reservation Period. Interested parties’ personal data will be shared with the Auctioneer (iamsold Ltd). If considering a mortgage, inspect and consider the property carefully with your lender before bidding. A Buyer Information Pack is provided. The buyer will pay £349 inc VAT for this pack which you must view before bidding.

The buyer signs a Reservation Agreement and makes payment of a Non-Refundable Reservation Fee of 4.5% of the purchase price inc VAT, subject to a minimum of £6,600 inc VAT. This Fee is paid to reserve the property to the buyer during the Reservation Period and is paid in addition to the purchase price. The Fee is considered within calculations for stamp duty"

So you pay £349+VAT to even get involved, no survey can be done (?), and then if you make the winning bid you pay an ADDITIONAL £6.6k on top of the purchase price whatever happens AND you pay stamp duty on that 6.6k.

Have I got it wrong?

Dont go anywhere near a property being sold like this. As far as i can see there is no benefit to the buyer, only the seller or auction house.

someone else may be able to explain it better.

I wouldnt touch them with a bargepole

Rip off.

Yeah that's the thing isn't it: it just sounds ridiculous but I've seen a few like this - there must be some specific reason why its done? Surely not simply a money making scam? Its through an established estate agent too.

After you have paid your non-refundable reservation fee, the MMA company can mess about during the conveyancing until you give up and look for another property. They can collect multiple reservation fees that way.

I assume it’s for houses that won’t sell easily or get a mortgage. We were encouraged to use it by agents after sales had fallen through - it costs the buyers rather than the agents and we didn’t do it.
I am not clear why this was pushed rather than a normal house auction; it must make the agents more money though the high deposit and it’s non refundable.

Yes. That is correct and with a short time frame to complete. Normally properties that you can’t get a mortgage on, but can sometimes be for a quick sale.
you wouldn’t have a survey on a property like this because it’s not normal and not going to tell you anything you can’t see if you view, or that’s in “the pack”. Once deposit is paid you could if you want but I can’t see why you would do that.

I feel this isn’t the property for you.

Yes, it's ridiculous. Steer very clear of them all. I can't see an advantage from a buyer's persepctive.

"Surely not simply a money making scam?"

It is exactly that. The agent and the EA get paid irrespective of whether a sale completes or not.

If the seller wants to back out, tough - they're liable for those fees for 12 months after listing with them.

Read the 1 star Trustpilot reviews for iamsold. Have gin to hand.