Most people don’t realise that there is more than one auction method these days but don’t be put off by the choice. Here is a short explanation of each method.
Traditional online auctions will be more familiar to most and If you’ve watched ‘Homes Under the Hammer’ then you’ve got a pretty good idea of how it all works. With a traditional online auction, exchange occurs online immediately at the end of the specified auction period. This means that the buyer and seller have now entered into a binding contract. The winning buyer now has 28 days to complete the sale. Buyers who use this method are likely to be cash buyers or buyers who have pre-arranged financing. As there is a hard deadline for completion, buyers have a tight timescale to get a mortgage arranged.
Conditional online auctions (also known as the modern method) work slightly different as exchange does not occur immediately at the end of the specified auction period. What happens instead is that a reservation agreement between the buyer and the seller is created. This gives the winning buyer exclusivity for 20 days to exchange upon the property. Buyers will have breathing room to get their finances in order and organise a mortgage for the purchase.
Subscribe to our top secret tips for selling your property series here