Happy new year readers, in this article will focus on the assertion that auctioneers offer speed, certainty and transparency for both sellers and buyers…but, strictly speaking that isn’t always the case.

Don’t worry, I’m not just going to winge and moan for 1,000 words - I am going to share my thoughts on a solution.

The loophole we are going to discuss is the pre-auction/post-auction conundrum. Here’s the thing with this specific issue, the auctioneers, on their websites and in their catalogues - as well as the RICS common auction conditions and the law around real estate auctions - all of these reference points refer to the point of exchange of contracts being upon the fall of the gavel (hammer).

When a property is exchanged pre-or-post auction, the process consists of offer, negotiation, acceptance of the offer, payment of the deposit with the buyer’s fee, exchange of documents and introduction to solicitors. Now this process just sounds like an expedited version of a private treaty (estate agency) sale.

With the increase of auctioneers operating remotely online, the number of pre-and-post auction sales have increased. One of the issues we have seen is people agreeing to purchase a property at auction, with completed paperwork (contracts), who then decide not to send the deposit.  

Following not sending the deposit, the auctioneers notify the buyer that they have exchanged and not paying the deposit and buyers fee in the timescales agreed is a material breach of the contract. Perhaps, shortly after the auctioneers make contact with the buyer, the seller’s solicitor follows up, and re-affirms the position. The position being that there was an exchange of contracts under auction terms and conditions and the buyer is in breach of those obligations under the terms and conditions of the auction sale.