Written by: Paul Thompson on 1st March 2022
At Pugh’s, we’ve been selling property at our traditional auctions for over 25 years. The exciting and welcoming atmosphere combined with the security of an auction sale are the reason Pugh’s auctions are so well respected and attended.
Below some of the reasons why we choose to use the traditional method of auction rather than the Modern Method of Auction:
Security
One of the reasons many sellers choose traditional auctions over the modern method is due to the security of the sale they provide. Once the gavel falls at the auction, a legal contract is formed, and the buyer is obliged to pay a 10% deposit on the day. This means they are legally committed to the purchase and can’t pull out, giving the seller much more security.
With the modern method of auction, contracts aren’t exchanged at the point of a successful bid. Instead, a reservation fee is taken and then 56 days are given to exchange and complete. This increases the risk that a buyer could pull out of the purchase after the sale has been agreed as they are under no legal obligations to complete the purchase.
Speed of sale
With the traditional method of auction, vendors are guaranteed to have the sale completed within the 28 days of the auction; with the modern method of auction, buyers have 56 days to complete the purchase.
With the modern method of auction, the buyer has 28 days after the auction to exchange contracts, with another 28 days given to complete. During this initial 28-day period, the buyer will typically complete their due diligence by arranging for a survey or mortgage valuation. If the buyer fails to exchange or finds a problem during this process and has to withdraw, then the sale falls through, meaning the seller is back to square one and it could end up being months before the property is sold.
Sell your property to a cash buyer
Properties that are not deemed suitable for mortgage lending are often sold at auction to cash buyers. Traditional auctions often attract a bigger audience of cash buyers due to having only 28 days to complete the purchase which is often not enough time to arrange a mortgage. By selling to cash buyers, the seller has more security over the sale.
Flexibility
Working with so many buyers, vendors and agents has taught us that flexibility is needed at times; buyers and sellers have different requirements, agents have different business models etc.
Each property and vendor are treated as individual cases. As a result, you’ll see properties in our auctions with extended completion timescales.
This flexibility has meant we can stick to our trusted traditional auction method without needing to confuse matters and lose buyers’ trust with the Modern Method of Auction. This method sells itself on extended timescales, so we have maintained the benefits of our traditional auction method with tweaks to make it work for everyone.
Looking to sell property or land?
If you have any questions about auctions or are looking to sell property or land, our expert team can offer FREE advice. Simply call us on 0345 505 1200 or click here if you’d like to arrange a free auction appraisal.
For details of our upcoming auction dates follow this link.
Written by: Paul Thompson on 1st March 2022
Paul has over 34 years’ experience of the property industry including 14 years experience of running one of the countries most successful commercial and residential property auction houses as a Director, Auctioneer and formerly 100% shareholder.
Paul is a Chartered Surveyor and member of the National Association of Valuers and Auctioneers (NAVA).
