Frequently asked questions
Find the answer to our most frequently asked questions below:
A Private Treaty sale is the legal name for an open market sale usually negotiated via an Estate Agent between buyer and seller. Once a price is agreed, Solicitors are instructed and all parties work the sale through to exchange and completion. There are no Reservation Fees or timescales on a Private Treaty sale but this can cause completions in excess of 100 days* with around 30%^ of sales falling through. All auction sales have an end date and once the auction closes and an acceptable bid is agreed, a Reservation Fee is typically paid by the buyer to secure the property or the property exchanges which reduces the fall-through rate to around 5%. This gives buyers and sellers speed and security with fixed completion timescales; typically 28 days for Traditional Auction and 56 days*^ for Modern Method of Auction from receipt of draft contract.
A Reservation Agreement is a signed commitment between the buyer and the seller to complete the transaction, reducing the risk of a sale falling through. It exclusively reserves the buyer the right to complete the purchase of the property within the Reservation Period, providing you, the Seller, with reassurance that they are committed to the sale, so everyone can proceed with confidence and peace of mind.
An attractive Starting Bid increases interest and encourages competitive bidding between prospective buyers, which can help to drive up the final Selling Price of your property. Auction is for those sellers who are looking for the additional benefits of speed and security so pricing strategies are designed to help your property sell quickly. However, you always have control with your undisclosed Reserve Price (the minimum amount you are prepared to sell for) which means if no bids meet this, your property does not sell.
Should a property not sell in the first auction cycle it is relisted for a second period. We can run as many auction cycles as it takes to successfully find a bidder. You can withdraw the property once the 60 day sole selling rights has expired with no charge to yourself, subject to a 21 day withdrawal period.
If your circumstances change, you should discuss this with your Auction Specialist as soon as possible, who will be able to advise you of your options. If you do need to withdraw your property from sale at auction you need to give 21 days written notice. If withdrawal is completed within your minimum 60 day contract period, you may be liable for auction fees. If an auction has been completed and a sale has been agreed and you wish to withdraw from the sale, you will likely be liable for auction fees as detailed in your Auction Contract. If you have any concerns, you should always discuss these with your Auction Specialist.
Auction is best suited to those not in a chain. You need to ensure you are able to complete the sale within the timescale detailed in the Auction Terms & Conditions. When you agree to sell your property at auction, you sign an Auction Contract, legally agreeing to adhere to these otherwise you are at risk of breaching the terms of the Auction Contract which is likely to have financial implications.
Medway Law are the sister company of iamsold, specialising in auction sale Conveyancing. The team at Medway have been set up with the key milestones in the contract in mind and will offer you the best opportunity for a speedy and secure transaction within your contractual timeframes. As Medway Law prepare your Auction Pack for the property, they have existing knowledge of the property’s background which helps in providing a smoother Conveyancing process once a buyer is found. You can use the free InCase App to keep up to date with progress and sign important documents from the comfort of your own home to save time and get your sale moving as quickly as possible.
An Auction Pack is required when selling at auction and is a collection of legal documentation assembled to give any potential purchasers and their Solicitors essential information to make an informed decision on whether to bid on a property. It is very similar to the work undertaken by a Solicitor during the Conveyancing process on the open market. By collecting this information upfront it reduces the risk of a sale falling through by identifying issues earlier, speeds up the time taken from a sale being agreed to completion and also gives buyers the confidence to bid and reserve a property. Documents typically include: Title Register, Title Plan, Property Information Forms, Fixtures and Fittings Forms, Local and Water Searches, EPC and any additional documents such as Epitomes of Title (Unregistered properties), Grants of Probate, Powers of Attorney, etc. For Leasehold properties a Management Pack is also provided detailing any information on the Leasehold.
If your property is a Leasehold property, you may be required to provide a Management Pack. This provides important information regarding the property which buyers will require sight of to make an informed decision on bidding. The pack is obtained from the Freeholder or their Managing Agent. The pack contains information on the management of the Freehold, ground rent, service charges, any planned future renovations, buildings insurance and other relevant information to ensure the buyer is aware of any responsibilities should they proceed with the transaction. It also contains information required by the buyer to transfer ownership.
It’s important that negotiations are carried out by the Partner Agent and iamsold whilst you are under contract and there a number of reasons for this. As the seller, if you accept an offer privately, you will become liable for the auction fees rather than the buyer due to the terms of the Auction Contract. Our sale methods are designed to provide commitment and security to both parties, and it is likely that you have chosen this method of sale for those specific reasons. Our aim is to help you sell your property so we will work with any interested party if they are unsure about auction, so that we can try and agree a sale for you.
This type of agreement is typical with properties marketed under auction terms. Sole Selling Rights means that the property can only be marketed and sold through iamsold and our partnered Estate Agent for the duration of the contract. If the property was to also be marketed under different terms by any additional agents then this is likely to damage your marketing and encourage buyers to avoid the Auction Terms, and commitment that you have chosen as a seller for very specific reasons. There is also a strong possibility that you could make yourself liable for ‘multiple’ agency fees.
Should an auction end with the highest bid being below your Reserve Price, then your Auction Specialist will still discuss this with you and you could, if desired, accept this bid.
With the Modern Method of Auction; the bid binds the buyer to pay a Reservation Fee and sign a Reservation Agreement. It does not bind the buyer to legally buy the property but instead allows them to reserve the right to exclusively exchange contracts on the property at an agreed price within 56 days*^ of the draft contracts being received by the buyer’s Solicitors.
Generally the advice when faced with this scenario is to allow the auction run to help you achieve the best price possible. However, your Auction Specialist will be on hand to offer the best advice. If you decide that an offer is acceptable to you then a deal can be agreed prior to the auction ending. Your buyer will still be bound by the Auction Terms and Conditions of the auction.
This is the minimum price that you agree the property can be sold for. This figure is confidential and is not disclosed to interested parties, however as a guide the reserve is generally no more than 10% in excess of the Starting Bid. The ideal scenario is to generate enough interest to exceed the agreed Reserve Price, however, you must be comfortable should this be the highest achieved.
With every auction there is a Starting Bid. This is the price published for each property and confirms the level at which the bidding is suggested to begin. Starting Bids are for guidance only, they are not the price that the property is being sold for. Each Starting Bid has a corresponding Reserve Price but this is kept confidential between the seller and the Auctioneer.
Not at all. Each property has an undisclosed Reserve Price, this is the minimum amount that you agree that you are willing to accept for your property. Only the Starting Bid and any bids received are visible during the auction as the Reserve Price remains confidential. If the Reserve Price has been met, or exceeded, then you are obligated to sell the property upon conclusion of the auction. Please note, should you decide not to proceed with a sale at or above your Reserve Price then you may be liable for any contracted fees – Speak to your Auction Specialist about this if it is of concern.
Once an Auction Pack has been completed and signed off, your Auction Specialist will discuss potential end dates for your property auction with you. This will be dependent on the level of interest created whilst the property has been in Pre-Auction Marketing stage. The length of auction cycle is dependent on interest levels, and usually this will be between 2-14 days. This enables us to ensure the time that your property is live is bespoke to your situation. You can tell how much time is remaining on your property’s auction on the website or by speaking with your Auction Specialist.
If you are looking for a sale with more security or need to sell quickly, then auction is certainly worth considering. Due to the quicker timescales involved, if you are likely to be in a chain, i.e. you are moving on, it is unlikely auction will be right for you.
A Reservation Agreement is a signed commitment between the buyer and the seller to complete the transaction, reducing the risk of a sale falling through. As a buyer, it exclusively reserves you the right to complete the purchase of the property within the Reservation Period, meaning the seller cannot sell to anyone else during that time. It also helps provide the Seller with reassurance that you are committed to the sale, so everyone can proceed with confidence and peace of mind.
Whilst the Traditional Auction is usually not suitable for those buying with a mortgage, the Modern Method of Auction allows a longer period of time to exchange and complete to enable buyers requiring finance, the time to secure their mortgage. As mortgages are subject to lending criteria, affordability and survey and it is recommended that you discuss your requirements with your lender/financial advisor prior to bidding. Ideally, having a mortgage valuation conducted prior to bidding makes the process a lot quicker and gives you a guide as to your affordability before placing your bids.
Before you place a bid, you should carry out due diligence on the property and review all documentation, including the Auction Terms & Conditions, to make sure you are able to fulfil any obligations. Before bidding you should ensure you have the funds available should you be the winning bidder. If you do need to withdraw a bid before the auction ends, you should contact the Auction Specialist as soon as possible. If you are the winning bidder when the auctions ends, you are likely to be liable for auction fees detailed in the Auction Terms and Conditions if you do not wish to purchase, so it is best to make sure you are happy to proceed before placing any bids.
Auction is best suited to those not in a chain. You need to ensure you are able to complete the purchase within the timescale detailed in the Auction Terms & Conditions. When registering to bid, you are legally agreeing to these so you must be in a position to fulfil these obligations otherwise you risk breaching the Auction Contract terms which is likely to have financial implications.
A non-refundable Reservation Fee is required from the winning bidder as a way of securing a property to them for the reservation period. It also provides the seller with added reassurance that the sale is likely to proceed smoothly as it reduces the chance of a fall-through. The Reservation Fee also provides the buyer with the same reassurance, as the seller is bound by the same terms of the auction, which means they cannot accept an offer from another party during the reservation period.
A Buyer Information Pack contains essential information that you can review when completing your own due diligence prior to bidding on a property. It contains information about the property including things like Local Authority Searches and Title Information. The pack may not contain everything you need to know about the property. This information can even be reviewed by your Solicitor. Reviewing this information upfront along with your own diligence helps prevent surprises later and make the auction completion deadlines much more achievable.
As a business we pride ourselves on best practice and Compliance which is especially important in the property industry with financial transactions regularly taking place. We like to ensure that we always know who we are speaking to and dealing with during any business transaction. To do this we need to take contact details and verify ID as part of our registration process to reduce the risk for everyone in the process.
Absolutely, we work in partnership with the listing agent who will facilitate a viewing in exactly the same way as a viewing on a property for sale on the open market. Contact the listing agent to arrange a viewing and iamsold will contact you afterwards to get your feedback.
Automatic Bidding is offered in case a bidder is unable to watch an auction end and place further bids for themselves. Automatic Bidding requires you to place an initial bid and identify a level that you would be willing to bid up to. Should you be outbid then the system will automatically place a further bid on your behalf in increments (usually £500), above the previous bid. This continues until either bidding stops underneath your maximum bid or another bid exceeds your maximum level. You should be aware, placing a maximum bid level does not guarantee that you will be the bidder at that level as the system only adds an incremental bid of £500 to the previous bid received. Therefore, there is a chance that your bid could be just below your suggested “maximum” bid in the sequence. For example, your starting bid is £200,000 and your maximum is £220,000 – the increment of £500 in The Automatic Bidding tool will not outbid your own bid or increase the level of increment to reach the suggested maximum level. We would suggest that, if possible, you actively watch the live auction to have full control over your bidding levels.
Current HMRC policy is that the chargeable consideration (monies or monies worth) for a land or property transaction is what has been given (either directly or indirectly) in order to acquire the subject matter (i.e. property) of the transaction, by the purchaser or a person connected with them. This includes fees which have to be paid in order to acquire the property. This means that whatever the buyer pays, it will form part of the purchase price for the property and it will be included in their liability for Stamp Duty. In all circumstances we would recommend discussing this with your chosen Solicitors prior to committing to a bid.
Usually, the seller chooses for the buyer to pay the Reservation Fee as a sign of commitment and agreement to the Auction Terms and Conditions. As the seller does not typically cover this cost, they are aware that the buyer will consider this on top of a purchase price. Most sellers have decided to use the auction method because they are motivated by security and speed of sale over price achieved. As the buyer, as well as paying the Reservation Fee you also sign a Reservation Agreement which provides commitment between yourself and the seller to complete the transaction, reducing the risk of a sale not completing. The seller is also bound by the same terms meaning both buyer and seller have security from the Reservation Fee payment.
The Reservation Fee is held by iamsold to reserve the property to the buyer and show their commitment to the purchase. It is later used to cover the auction fees for the seller, paying the Listing Agent and Auctioneer who work in partnership to provide the auction
Our sales methods are designed to provide both the buyer and seller with confidence that a sale will proceed with a reduced risk of fall-through. With Modern Method of Auction, the bid obliges you to pay a Reservation Fee and sign the Reservation Agreement to obtain exclusivity for the reservation period. With Traditional Auction, once your bid has been accepted, or auction has been won, you are required to exchange contracts and pay a 10% deposit alongside the Reservation Fee. Completion is then generally expected within 28 days. With either method, if you do not complete, you will lose your non-refundable Reservation Fee.
By law we must put forward any offer that is made to the seller. It is then up to the seller to decide if they want to consider the offer and take the property out of the auction early. In this scenario, the Reservation Fee is still payable, and the Auction Terms and Conditions still apply. If you make an offer during the “Pre-Auction Marketing” phase, you need to consider that the Buyer Information Pack is not yet complete and there may be important information missing.
Before registering to bid, we recommend that you have viewed the property and looked through all the legal information supplied within the Buying Information Pack for each Lot. You should make sure you can meet any Auction Terms and Conditions before bidding. If you do not already have an account, you will need to create one before you can then register to bid on the property. Each property has a “bid to purchase” option on the website which you can click to start the registration process. You will be asked to provide some information to confirm your ID and may be asked to provide payment details for any applicable fees. We will need to approve you to bid, so it’s important to register as soon as possible if you would like to participate in the auction.
This depends on the seller’s circumstances or the level of interest generated in a property during the Pre-Auction Marketing period but can be anything from 48 hours to 14 days. You can easily save any properties you are interested using the “Watch List” feature, by creating an account on the website. We always recommend viewing the property in person beforehand and registering to bid as soon as possible so you are ready to make an offer when the property auction is live. Our Auction Specialists will keep all interested parties updated and should the seller decide to accept a bid prior to the end of an auction, then they will communicate this. If we are unaware of your interest in a property it is difficult to communicate any changes in circumstance.
* Source: Home Owners Alliance 2022
^ Property Industry eye article, 10 Jan 2022, data from Quick Move Now
*^ Based on standard properties. From receipt of draft contracts