A buyer’s guide to property auction

Buying a property is a major milestone, whether it’s your first house or a new home for a fresh start. Getting the keys to your new place is a moment like no other – in part because it marks a new chapter, but also because of the work you put into a move.

Hundreds of hours spent searching for perfect properties, arranging your paperwork, and packing up boxes make the run-up to owning your new home an emotional time, and by the time your next move comes around – likely years later – all the lessons you learned about how to make the process easier for next time have become a distant memory.

Now that you’re in the process of looking at your next home, there’s a new way to get moving, with the Modern Method of Auction (MMoA). iamsold’s MMoA provides you, as a buyer, with an alternative way to secure your next property in a transparent, secure, and fast way.

While Private Treaty has long been the most common method of sale, MMoA becomes more popular every year, as it solves many of the problems associated with traditional transactions. In 2021 alone, we helped over 5,000 buyers close on their dream property after buying via MMoA. No matter what type of property you are considering buying: countryside barn conversion, urban inner-city flat, or suburban detached family home – MMoA provides a wide range of property types to suit your needs.

To help you understand how auction can help you get into your new home quickly and easily, we’ve put together a guide to explain the ins and out of the process and why auction could be the way for you to get the keys to your next dream home.

Why choose to buy through auction?

iamsold auctions are typically run online. Buying through online auction offers you a host of benefits, and one of the key advantages is the quick and easy bidding process. So much of our lives are now conducted online; from shopping and booking holidays, to applying for jobs and completing degrees. We have pioneered online auctions so you can bid from the comfort of your home, 24 hours a day, 365 days a year.

There are two main types of auction, Modern Method of Auction and Traditional Auction. Both can be run online, the difference is the terms associated with them.

With MMoA, both the buyer and seller enter into a binding Reservation Agreement, and with Traditional (Unconditional) Auction there is an immediate exchange of contract, deposit and Reservation Fee paid. Both methods signal a commitment to completing the purchase and making the process secure with a low risk of sellers pulling out of the sale, immediately putting your mind at ease. At auction, all bidding activity is visible to you, meaning that auction offers complete transparency that can be reassuring if you are conscious of the threat of closed best and final offers possible at Private Treaty.

Buying at auction also offers quicker completion compared to Private Treaty. Fixed timescales aim for a 56 days completion time for MMoA* or 28 days for Traditional Auctions from when the contract is signed. This gives you the confidence to focus your energy on the fun parts like setting moving dates and planning the decorating. The extended 56-day completion speed of MMoA means you can plan your move easily and you still have plenty of time to arrange admin like finalising your mortgage.

How does the process work?

Where do I find the properties?

Our auction properties can be found online through our 24/7 search and bidding platform. Likewise, you can find properties for sale by auction on your favourite online property search engines, such as Rightmove and Zoopla. You can also find properties to be auctioned online through your local branch, so you can ask your Estate Agent for your options if you’re looking to buy at auction.

Do I still need to view the property?

We would always recommend viewing any property you are considering – seeing the property in person ensures it’s the right one before you put in your bid. You can book your viewing through the Estate Agent, and then one of our team will get in touch to hear your feedback and discuss any interest in bidding.

What is the Buyer Information Pack?

It’s worth carrying out your due diligence before you place a bid. Each property has a Buyer Information Pack to detail everything you need to know. You will need to create an account on the iamsold website or speak to one of our Auction Specialists in order to download the pack. We highly recommend that you review this information carefully before bidding, as well as reviewing the pack with your Solicitor.

So you’ve found a house, what’s next?

Information will be available about how your chosen property is being sold so that you can check if it’s being sold via MMoA or Traditional Auction. It’s worth checking if the auction will be taking place at a live/in-room event or online. We also advise ensuring you can meet the requirements of the auction method before bidding, double-check that you have the necessary funds available for any deposits and fees, and register to bid, so you don’t miss out on securing your dream home.

How do I register to bid?

Once you’re ready to bid, you can log in to your account and find the property you want to bid on – you’ll see an option to “bid to purchase” alongside the property details. From there, follow the on-screen prompts to complete your registration. This will involve providing some personal information and agreeing to the Auction Terms and Conditions.

We will also contact you as we will need to verify your ID – a member of the team will contact you to do this.

What do I need to evidence for the background checks?

By law we are required to complete Identification Checks on all parties involved in a property transaction to make sure that you can fund the purchase, and for us to verify the source of funds used.

This will be done through a quick electronic identification search, and we will ask you a few authentication questions. The search will leave a soft footprint on your credit report but has no effect on your credit score and cannot be seen by credit service providers. We will never ask you to provide any account sensitive information such as account numbers, pin numbers or passwords. On occasion, we may require additional information documents to be provided and we will talk you through what is needed, should this be the case.

How does the bidding process work?

You can bid in different ways including, online or over the phone. With online bidding, our system allows you to view the current bid, the number of bidders and a live countdown until the auction ends. You are also able to set an automated maximum bid and the system will bid on your behalf. These features are designed to give you maximum control over your buying process.

Do you know about your fees?

You will have 56 days for MMoA* or 28 Days for Traditional Auction to complete the purchase. Regardless of how you’re buying, you need to pay a deposit or fee to reserve the property, sign a Reservation Agreement and complete an identification process with our friendly team. You will also need to instruct a Solicitor to act on your behalf.

With MMoA you will need to pay a Reservation Fee or Reservation Deposit to commit to the purchase and reserve the property during the reservation period. Both the Reservation Fee and Reservation Deposit are a percentage of the purchase price and are subject to a minimum value. They can vary depending on the property, so it is important to check the property details before the auction. The Reservation Fee includes VAT, and they are paid slightly differently.

The Reservation Fee is used to cover the seller’s auction and Estate Agency fees. It is non-refundable and paid in addition to the agreed purchase price. You should take into consideration the Reservation Fee when deciding the total amount that you wish to pay for a property.

The Reservation Deposit is paid by the buyer in the instances that the seller agrees to pay the fees. It is non-refundable and forms part of the agreed purchase price. The Reservation Deposit forms part of the final purchase price.

With Traditional Auction, you will need to pay a deposit, which is typically 10% and goes towards the purchase price, and a non-refundable reservation fee and subject to a minimum value, which is in addition to the purchase price. The Fees are listed on the property details and may vary from property to property so it is important to check the documentation before the auction. This is paid by the buyer when the auction ends.

I am the winning bidder and have done all the checks, what happens now?

Our expert Sales Progression team will then take the sale through to completion, and they will keep you updated every step of the way until the point of handing over the keys. Then there’ll be congratulations in order for the purchase of your new property!

To keep all this information close to hand throughout your buying journey, you can download a copy of our Buyers Guide or to see the answers to some frequently asked questions, take a look at our FAQs.