Buying or selling a property in a traditional auction can be a hair-raising affair, sometimes with nerves of steel involved.
But the auction arena is changing and another way of purchasing property and land is becoming increasingly popular – the modern method of auction, which allows buyers to bid online.
While it isn’t a particularly new concept, its reputation is growing as property owners recognise the range of benefits it provides.
Before committing to either the traditional or modern auction method, it’s important that buyers and sellers investigate the detail of both options carefully to make sure their choice is fit for their needs.
How does a traditional auction work?
Many different types of properties and land – often repossessed, uninhabitable or unmortgageable properties and land for development – are bought and sold by a traditional auction method.
Under the traditional method, a guide or starting price will usually be given and the vendor will often set a reserve price. If the property does not reach this minimum cost requirement, it will not be sold.
The buyer with the winning bid is committed to the purchase and a completion date regardless of any potential issues they may subsequently discover on the property.
A 10% non-refundable deposit is also required, contracts are exchanged on the same day and completion must happen within 28 days.