A client – a seller – called me last week. We had already completed the property information form and other necessary information so we could move quickly as soon as a buyer was found.
I assumed he was calling me to tell me a sale had been agreed.
He wasn’t. He told me that he hadn’t been able to agree a quick sale, so the estate agent had suggested he should sell the property by modern method of auction (MMoA). He was very excited about it and said it seemed the best way to sell his property.
He had been reassured that it would go smoothly and so had signed up. He was excited to see how quickly the house would sell, and pleased that he would get his money within a set period of time.
How do we respond to this? Do we tell our clients it’s not really an auction? The estate agent has told the seller it’s an auction but with a different name – but selling at a traditional auction guarantees certainty and MMoA does not.
And the fees? The estate agent gets paid for the listing and, if there is a reservation fee, they get to keep all or part of it whether or not completion takes place.
Who really benefits? In a traditional auction the hammer falls and the buyer is deemed to have exchanged contracts. There is a legally binding transaction.
In MMoA, this does not happen. How do you explain to your buyer that the ‘winning‘ bidder has merely bought themselves a reservation period, with a non-refundable deposit, and it’s only then that the conveyancing part of the process can begin?
Calling something an auction does not make it an auction.
This column is written by a real high street conveyancer who wishes to remain anonymous. The views expressed are those of the author and not necessarily those of Today’s Conveyancer.
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