How timed auctions work and what are their benefits
Compared to ‘traditional’ auctions, in which an auctioneer calls the bids, timed auctions are less well-known. This is despite this method of auction having a number of benefits to both buyers and sellers. In our latest blog, Auction House London, which has a diverse range of lots available for timed auctions, explains what timed auctions are, how they work and what are the benefits of this type of property auction.
What are timed auctions?
As their name suggests, timed auctions run for a defined period of time, typically seven days. As the auction progresses, bidders can raise their bid. When the bidding window closes, whoever has bid the highest, wins, providing the reserve price has been met.
How to do timed auctions work?
Prior to the timed auction, interested parties will need to register in order to bid. For buyers wanting to bid in Auction House London’s timed auctions, they will need to register and agree to our online terms and conditions. Registration is a quick and straightforward process and is done online. Interested bidders will need to provide some personal details, upload a copy of their passport and a recent utility bill as proof of address.
A legal pack prepared by the seller’s solicitor are available to download via the property details page on the website. The legal pack typically includes a copy of the Register of Title, the Land Registry and Local Searches, as well as Property Information Form, Leases, tenancy Agreements and Planning Permission Documentation.
Is the sale via conditional or unconditional auction?
Prior to bidding on a lot in a timed auction, bidders will need to check whether the sale is by conditional auction or unconditional auction. The status of the auction is clearly stated on each individual lot listed in our timed auctions.
Unconditional auctions are similar to traditional auctions, in the sense that exchange on the property occurs at the end of the timed auction and completion is 28 days later. Buyers will therefore need to ensure they have the funds available to complete in 28 days and a 10% deposit available on exchange at the end of the auction.
Conditional auctions involve the highest bidder paying a reservation deposit after the auction which secures the sale. They then have 28 days after the conditional auction has ended to exchange contracts and a further 28 days to complete. Conditional auctions therefore give buyers time to arrange things like surveys, mortgages and other finance prior to exchange.
Open day viewings
Property listed in timed auctions can usually be viewed via open days, giving interested parties the chance to look at the property and make a judgement on its value. It can be wise to take a surveyor, builder or architect to an open day viewing for an expert opinion on the house.
All our open day viewings are listed on our website. An Auction House London team members attends the open days to answer any questions or queries an interested buyer may have on the property and the process.
Reserve and guide prices
All properties sold in our timed auctions have a guide price, which is the recommended sum the bidding starts at. It is not a valuation and is typically lower than the reserve price, which is the minimum price the sellers will sell their property for. The reserve price is not disclosed to bidders but will not be more than 10% different to the guide price. Auction House London is unable to sell a property for less thn the buyer’s reserve price.
Instructing a solicitor
Before bidding in a timed auction, it is important to be organised. A solicitor should be instructed to look at the legal pack before committing to making the purchase.
How do you bid?
After registering interest in a property and securing authorisation to bid, buyers can bid in timed auctions via live online bidding or by online proxy. With the former, buyers can watch the auction countdown online and place live bids. For interested parties unable to bid online, their highest offer can be submitted prior to the timed auction. Bidders are notified if the proxy bid had met the reserve price.
How long do timed auctions run for?
Auction House London’s timed auctions usually run for seven days. This however can be flexible and is dependent on the unique requirements of the seller. Countdown is clearly stated in real-time.
What happens if you’re the highest bidder?
The highest bidder will be required to pay 10% of the purchase price as well as agreed costs by debit card when the unconditional timed auction is over. The reservation deposit will need to be paid via electronic bank transfer or debit card when the hammer falls on a conditional auction. This is held by Auction House London as a stakeholder until the exchange of contracts,
Benefits of timed auctions
For sellers that decide to use timed auctions to sell their home and buyers using the method to purchase property, one of the biggest benefits is that there is no risk of renegotiation or gazumping. When the hammer falls that is the price the property has sold for.
The whole process is quick and transparent and, unlike more traditional ways of buying and selling property, does not drag on for months.
Through competition, sellers have the potential to obtain a premium price for their property, but by the same token, bargains are also there to be had at timed auctions for buyers.
Unlike traditional property auctions, this method of bidding can be less nerve racking for buyers and sellers, who are new to auctions.
You can have a look at all the lots up for grabs in Auction House London’s timed auctions. Sellers interested in selling via auction can request a free valuation by the Auction House London team. As always, if you have any questions about our auctions, please get in touch with our friendly team of property auction professionals.