Glossary of terms
To help you further understand the various terms used in the auction process, we've compiled a simple glossary below:
The Modern Method of Auction is also known as a Conditional Auction: After the acceptance of an offer or at the close of the auction, the buyer must place a non-refundable Reservation Fee or Reservation Deposit to reserve the property. Whether you are required to pay a Reservation Fee or Deposit varies from property to property depending on the method of instruction from the seller – this will be clearly stated in the Auction Terms and Conditions attached to each property. The buyer is then given 56 days* to complete the transaction from Draft Contract being received by the buyer’s Solicitor, meaning this method of auction allows for those buying with a mortgage, as there is time to arrange finance.
Traditional Auction is also known as an Unconditional Auction: When a property is sold in this way a 10% deposit is paid which forms part of the Purchase Price when the auction ends, along with a non-refundable Reservation Fee and contracts are exchanged. Completion then normally takes place 28 days later. This type of auction is generally best suited to investors and property professionals who are cash buyers as the timescale restricts those looking to purchase with a mortgage.
Every property is advertised with a Starting Bid, which is the recommended level at which the bidding should open. It must not be relied upon by potential buyers as a valuation, as in most cases the confidential Reserve Price is above this level. Please note that the Reserve Price will generally be no more than 10% above the starting price. Both the Reserve Price and Starting Bid are subject to change.
This is the minimum price that a seller is willing to accept for their property. The property will not be sold for any less than this agreed amount. Reserve Prices are not published; this is a private agreement between the seller and the Auctioneer. This figure is generally no more than 10% in excess of the Starting Bid. Both the Reserve Price and Starting Bid can be subject to change.
Unless otherwise stated, each property is sold subject to a Reservation Fee. If you are interested in a particular lot before you bid you should read the Auction Terms and Conditions attached to the property carefully. Please note that the Reservation Fee is paid in addition to the final Selling Price, and is received on a non-refundable basis. It is held as a reservation against the property until exchange of contracts takes place. If the sale falls through due to the seller breaching the Terms of the agreement, the Reservation Fee or Deposit will be repaid to the buyer in full. Fees paid to the Auctioneer may be considered as part of the chargeable consideration for the property and be included in the calculation for Stamp Duty liability. Further clarification on this must be sought from your Legal Representative.
Some of our properties are subject to a Buyers Administration Fee. If you are interested in a particular lot, before you bid you should read the Auction Terms and Conditions attached to the property carefully. Please note that the Buyers Administration Fee is in addition to the final Selling Price, and is received on a non-refundable basis. If the sale falls through due to the seller breaching the Terms of the agreement, the Buyer’s Administration Fee is repaid to the buyer in full.
The Reservation Agreement lays out in plain English the Terms and Conditions which need to be met by the buyer. Buyers are required to agree to these Terms and Conditions before the beginning of an auction, to ensure they are committed to fulfilling the necessary requirements, should they be the winning bidder.
If you wish to place a pre-auction offer you will need to speak with a member of the auction team who will explain the process to you. The seller can consider offers prior to the live auction, but it is at their discretion to do so.
Here, the buyer signs the contract for sale and sends it to the seller, who also signs it. This is the point at which both parties are legally obliged to complete the transaction. The purchase is not actually complete at this point, but there is a legal obligation for the buyer to buy and the seller to sell.
This is when the purchase becomes final. The Purchase Price is paid in full by the buyer’s Solicitor and received by the seller’s Solicitor. Completion can take place at the same time as the exchange of contracts (see above) but is usually a week or so later. The seller must move out of the property on this date and release the keys to the buyer, who may move into the property.