Online Property Auctions – What You Need to Know

With the property market moving up and down like a yo-yo, it is sometimes hard to know when to sell, or when to buy!

The ways to do both have increased significantly over the last few years, with the internet playing a large part. An online property auction is one of the more popular methods, as those looking for a new home can scout a bargain. Those looking to sell look to do it fast.

What, though, happens in an online property auction and how can you make it work for you?

What is an online property auction?

Much like any other type of auction, be it eBay or in an auction house, you start by placing a bid, in this case on a property. Hopefully you bid the most, and win! The properties are normally listed for 30 days. Within this time, you can view the property either virtually or in person. Sometimes, a property may be listed on auction pages but bidding will not yet be live. Speak with the online estate agent to see if a viewing is possible at this stage.

However, there are certain guidelines you must follow to be able to bid, which are covered in more detail below.

How to bid on an online property auction

The hammer falls in much the same way as an auction in a traditional auction house. With this type of auction, you simply browse the properties on offer. Once done, you can register with our auction department. This makes you eligible to bid.

We would recommend that you check the details of the property before bidding. With the speed at which online property auctions can be completed, you don’t want to be doubting yourself. Having as much information as possible makes the whole process much smoother, and stress-free.

Could I bid on an auction property before the actual auction?

Yes, if the vendor allows. Then, they may accept the bid or prefer it to go to auction where they may receive higher bids.

Winning an online auction

If your bid is the winning one, that’s great, you have secured a new property! The type of lot decides what happens next.

Conditional Lots

If you win an auction on a conditional lot, as a buyer, you will need to:

  • Exchange contracts within 28 days
  • Complete the purchase within an additional 28 days of exchange
  • Pay a non-refundable deposit of £3600
  • Pay an admin fee of £780

Unconditional lots

If you win an auction on an unconditional lot, as a buyer, you will need to:

  • Exchange contracts upon completion of auction
  • Complete the sale within 28 days
  • Pay a 10% deposit (capped at a maximum value of £3600)
  • Pay an admin fee of £780

There are also reservation fees to consider. These do not contribute towards the cost of the property or land. They also vary depending on whether the lot is conditional or unconditional.

Reservation fees – conditional lots

  • Exchange contracts within 28 days
  • Complete the purchase within an additional 28 days of the exchange
  • A 5% non-refundable reservation fee (capped at a maximum of £5000)

Reservation fees – unconditional lots

  • Complete the sale within 28 days
  • You will be legally bound to buy the property/lot and the vendor legally bound to sell
  • Pay a 5% deposit and a 5% reservation fee (capped at a maximum of £5000)

Can I use a mortgage to pay for an auction property?

That depends. If your mortgage lender has agreed that a mortgage can be applied to the property you are bidding on, then yes. If, however, the property is shown as unconditional or as an unconditional reservation, you cannot. This is because exchanges on these properties are immediate. You will need the finances to be organised prior to bidding.

Selling your house at an online auction

Selling your house online through an auction is an easy process that can bring you great financial returns without the complications of a chain.

Using an online property auction specialist like Doorsteps puts you in control.

Your property gets listed, in our case for free. You then set a reserve price. This means your property won’t sell unless it reaches this amount.

The chosen estate agent will then promote the property via their online auction pages (and windows if they are a high street vendor).

Once the auction begins, you can watch bids come in. If a sale is agreed, the buyer pays their deposit immediately. This now makes the sale binding within 28 or 56 days, depending on whether your property was listed as conditional or unconditional.

Responsibilities of the seller

Prior to receiving bids, as a seller, you have the responsibility of providing a legal pack. These are key to any auction. They will allow prospective buyers to find out key information relating to the property. They would normally include, but are not limited to:

  • The reservation agreement or contract
  • Auction terms and conditions
  • Special conditions of sales
  • A copy of the EPC
  • Property information form (TA6)
  • Fittings and content form (TA10)
  • Any planning permission documents

These packs will take approximately 2 weeks to complete. If you are planning to sell via auction, it would be worth starting this process as early as possible, especially due to the length of time local authority checks can take.

At Doorsteps, we can get your EPC for you. Simply contact our team for guidance. We operate 24/7 to ensure your property goals are met. With over 25 years of auction experience, we promise to sell fast and sell for free.

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