What fees and charges you can expect to pay at Auctions. At The World of Auctions and many other Auction houses across England and Wales.
Please note that: at “The world of auctions” we believe that our focus should be on providing the highest possible standard of service to our buyers and seller alike.
With this in mind. We will not negotiate on our fee level. As doing so will only damage our ability to continue to serve you – our Auction Buyers and Investors.
There will usually be a “Contract documents charge payable to the auction team, which will be shown on the Auction Information page in the catalogue and in the property details too.
Sometimes a Buyer’s Premium will also be payable by the purchaser, this will be included in the property details.
There may on occasion be other fees or charges made that relate specifically to the property being sold – these should be referred to and explained either in the property details or often within contract of sale Special Conditions of Sale in the legal pack.
Sometimes, but not always Buyers may be required to reimburse the cost of searches and occasionally other costs too; such as the sellers legal costs.
What happens if I am the highest bidder at the auction?
During our live in room auctions You will be approached by a member of the auctions team, who will take you over to the contracts desk.
There you will be asked to provide proof of ID and residency, as well as further personal details these details will then be used to carry out a further electronic verification for money laundering purposes.
You will then pay over the deposit monies and any other charges stated in the auction catalogue such as the administration fee or buyer’s premium, before completing and signing the two copies of the memorandum of sale.
Once completed, you will be handed your copy of the memorandum of sale and related papers, and you will be asked to pass these to your solicitor.
After the auction, the auctions team will confirm your purchase in writing, notifying your solicitor and explaining next steps.
If your purchase is made “Outside the live auction room” then : the step will be exactly the same. Save , of course these steps will undertaken by auction team. Either , by email, or at a face to face meeting.
When do I pay my deposit?
The 10% deposit (subject to a minimum) must be paid soon after the hammer comes down. Or whenever the auctioneer and the buyer agree to exchange contracts – whichever event is the soonest.
This will be delt with by one of directors in our contracts team, where you will sign the Memorandum of Sale and pay over the required deposit and any fees.
You must Be sure to have the monies accessible in your bank account and refer to the catalogue to find out the payment methods accepted in the auction room.
How we hold deposits
Deposits Terms and Procedures
1. What is the Deposit?
The deposit is the sum paid by the Buyer to the Seller on acceptance by the Auctioneer of the Buyer’s bid, as a guarantee that the Buyer will proceed to completion of their purchase. If completion takes place without dispute, the sum becomes part payment of the purchase price.
At our auctions, the deposit must be paid as follows: as to the bidder security, by pre -authorised bank card payment and, as to any balance, by electronic bank transfer to our bank client account. We do not accept any other method of payment.
The deposit will be taken and held by us as stakeholder unless we expressly agree with the Seller that it is to be taken as agent for the Seller. If this is the case, it will be stated in the addendum for the Lot.
It is a pre-requisite that any deposit and/or bidder security, in whole or in part, can only be processed on completion of all AML ID Requirements and CDD to our satisfaction and in our absolute discretion.
2. Stakeholder or Agent – what does it mean?
2.1.If the deposit is taken as stakeholder
The stakeholder:
is effectively the agent of both Seller and Buyer in relation to the deposit
must not release the deposit until completion takes place.
If our Auctions take the deposit as stakeholder, we will keep any interest earned during the time it or any part of it is held by us.
2.2.If the deposit is to be taken as agent for the Seller
The agent must:
act in the best interests of the Seller in relation to the deposit
account to the Seller for interest on the deposit
release the deposit to the Seller (or, if we choose, to the Seller’s solicitors) after the auction without further reference to the Buyer, whether or not the Buyer completes their purchase.
A deposit taken as agent will, in effect, belong to the Seller as soon as it is paid to them although the Buyer may have a right to recover the deposit from the Seller if the Seller fails to complete.
Any dispute regarding whom the deposit belongs to must be resolved between the Seller and the Buyer.
3. Stakeholder or Agent – which capacity applies?
At our auctions, the deposit will normally be taken by us as stakeholder.
If we agree with the Seller that it is to be taken instead as agent, this will be stated in the addendum for the Lot.
If VAT is applicable to the property, the deposit will be taken as stakeholder in any event in order to avoid creating a VAT tax point on the date of contract.
4. Auctions procedures where the deposit is taken as stakeholder
4.1.Where a deposit is paid to us as stakeholder we are at liberty, if we choose, to transfer all or part of it prior to completion to the Seller’s solicitors for them to hold as stakeholder in our place. Sometimes, the special conditions provide that we must do this. In all such cases, we will pass the deposit on after funds clearance, net of any fees and commission that will be due to us from the Seller on completion. Any part of the deposit not so transferred will continue to be held by us in our stakeholder account pending confirmation of completion of the sale and purchase.
4.2.Where we hold as stakeholder up to the completion date for the sale and purchase of the Lot, we will release the deposit to the Seller’s solicitors on or very shortly after completion upon receipt from the Seller’s solicitors of a letter in our standard form, confirming that completion has taken place. If completion is delayed for any reason, we will retain the deposit as stakeholder pending resolution of the delay. See below, under paragraph 4.3, for what happens to the deposit in the event of delayed completion.
4.3.Where the Auctions hold a stakeholder deposit and completion is delayed:
It is not the Auctions’ responsibility to decide which party is in breach of contract, or which party has caused delay. Consequently, in any of these circumstances, we cannot decide which party is entitled to have the deposit released to them.
In such cases, we will only release the deposit with the express consent and authority of both the Seller and the Buyer.
If mutual consent is not forthcoming, or if there is a protracted delay in the matter being resolved, we may take legal proceedings which will involve asking the Court to hold the deposit pending a Court decision as to whom is entitled to have it. If proceedings are issued, we would usually seek costs against the party found to be in default.
5. Auctions procedures where the deposit is taken as agent
After the auction, we will release the deposit, less all fees due to us, after 7 working days from the date on which the deposit was received in our client account (unless we have been notified by our bank of any problems in the interim).
Release of the deposit will be without further reference to the Buyer, regardless of whether or not the Buyer completes the purchase of the Lot.
6. What happens if too much deposit has been paid?
Occasionally, an amount in respect of deposit monies that is greater than the contractually -required deposit is paid.
Please note that, in the interests of maintaining clarity in the auction buying and selling process and for administrative ease, the Auctions standard policy will be followed in all cases where an amount in excess of the contractually -required deposit is received.
The policy is that any such deposit excess will be returned as soon as reasonably possible once the amount received is held in cleared funds. Funds will normally be returned by bank transfer to the account indicated by the bidder or (at our option and at our entire discretion) by bank transfer or cheque to the solicitors indicated as acting in respect of the purchase of the Lot.
What is a Buyer’s Premium?
Some properties will be offered with a requirement for the purchaser to also pay a Buyer’s Premium to the auction room at the time of exchange.
The buyer’s premium is set in an agreement between the Vendor (the property seller) and the Auctioneer
The amount of buyers varies for each lot. But always be details at the bottom of the property particulars.
Buyer’s premium does not necessarily apply on all properties, but details for this will be shown in the property details where applicable.
What is an Administration/ contract documents charge Fee?
The Charge covers the auctioneer’s costs in servicing the requirements of all those interested in purchasing the property. It is common practice and the fee (plus VAT) will be payable by the buyer along with the 10% deposit after the gavel falls.
The amount can either be a fixed fee, or a percentage of the sale price (subject to a minimum amount). Please check the property details for more information.
How much is the deposit?
The deposit payable by the successful purchaser immediately after the hammer has fallen. It is normally 10% of the sale price.
For low value lots, this is subject to a minimum deposit figure which will be stated on the Auction Information page in the catalogue – it will normally be in the region of £3,000 – £5,000.
Deposits usually need to be paid from cleared funds, check the catalogue or with the auctions team for a list of accepted payment methods.
You must Please ensure sufficient funds are available in your account before bidding.
It is important to note that the bank account being used for payment of the deposit must be in the name of the purchaser. If it is not, then the individual/company named on the bank account will need to be ID verified as part of our required Anti Money Laundering procedures.
What are disbursements?
These are the additional charges incurred by the purchaser as part of the sales contract process.
They are not always charged, and can be attributed to either the buyer or the seller. Depending on the terms of each contract.
These Charges can include travel and mileage costs, additional professional advice, independent valuations, cost of searches, legal fees, additional documentation and supplements.
Please refer to the Special Conditions of Sale, The auction team or your solicitor for more details.
What payment methods do we accept?
As our focus in on providing a bespoke service – tailored to the buyer each of our different auctions teams have different policies, so you will need to check the Auction Information page attached to the property details or within the catalogue, which will advise you on what methods of payment will be accepted for each auction.
Auction teams may request cleared funds so payments by bank transfer, banker’s draft or debit card will be required. Some may allow payment by personal or business cheque, but do refer to the auction catalogue and speak with the auctions team if you are unsure.
Cash will not be accepted at any auction room, due to anti money laundering regulations.
If I buy a property, what do I need to pay and when?
If you are the successful bidder, you will need to pay your 10% deposit on the day or purchase (the fall of the auctioneers hammer) – whenever that is
In addition, you will also need to pay the Administration Charge and Buyer’s Premium or other charges (if applicable), which will be listed in the property details.
The balance of the purchase monies will be paid via your solicitor as part of the completion process.
If there are any disbursements or charges listed as part of the Special Condition of Sale in the legal pack, these will also become payable on completion. Your solicitor will be able to advise you on this.
How long do I have until I need to pay the remainder of the money?
The remainder of the purchase price needs to be with solicitor in readiness for legal completion to take place on the specified completion date.
The period between exchange at the auction and completion is usually 28 days, but you should always check in advance as the period may be shorter or longer.
There may be charges that also become payable on completion; please speak with your solicitor for advice and ensure you have sufficient funds to settle the full purchase price and any disbursements. Your solicitor will guide you through this process.
https://www.thetimes.com/life-style/property-home/article/how-to-buy-property-at-auction
https://www.lexisnexis.co.uk/legal/guidance/buying-property-at-auction?
