Auctions Fees | What Are The Costs To Buyers And Sellers?

Property auctions involve fees for buyers and for sellers. For sellers, the fees are straightforward. For buyers, they can be a lot more complicated. The trick is, as always, to read the auction legal pack. There can be fees in there which you will need to know about before you put in your bid.

Property Expert Series: Andy Thompson From SDL Auctions

The Costs Of Buying Or Selling At Property Auction

Amy: How does the fee structure work when you are either buying or selling at a property auction? Obviously, there are fees involved. Can you talk a little bit more about them?

Fees For The Seller

Andy: The fees for selling property are fairly standard. There will be a fee, similar to what you would be charged if you were selling with an estate agent. Often, there will be an entry fee. You will have to pay for your advert in the catalogue. And there will also be a sale fee.

Fees For The Buyer

Andy: It’s more important to consider the fees that buyers might incur at auction. Often there will be fees involved for a buyer which they wouldn’t get if they were buying from an estate agent.

So, nine times out of ten there will be a buyer’s premium, also called an admin fee. This is basically an additional fee that the buyer will have to pay to the auctioneer.

This might be £750. It might be a £1000. It might be a percentage of the purchase.

It varies depending on who the auctioneer is.

Obviously, this is an important thing to check on before you bid because you will need to factor that cost into your overall budget.

The Legal Pack

Andy: Something else to be aware of is that it’s not uncommon these days for a seller to include a contribution to their costs into the legal pack. And this is another reason why it’s crucial to read the legal pack.

So, it might be that on completion the buyer will have to pay the seller £500 towards their legal fees or pay £500 towards their auctioneer.

It could be 500 pounds towards their holiday fund, to be honest with you. Often, it’s included only as an extra way for a seller to get more money.

Because there are people who don’t do the research, as silly as that is. Some people will turn up and buy a property without reading the legal pack and then be hit with another £2000 worth of fees.

Savvy sellers will recognise that and target those people.

One of my jobs is to make sure that buyers have done their homework and are adjusting their bids so that any additional fees have been taken into account.

Join Our FREE Property Training Course Today

Sign up for our free online property training course today.

In there we cover a range of different property strategies to help you get started on building a long-term property portfolio or creating a cash flowing property business.

We also look at ways to increase your return on investment with any of the properties you may be considering and we also have a couple of cheat sheets and downloadable documents in there as well.

Just click the image below to join our free training course today.

Any Questions?

If you have any questions or thoughts about property auctions and fees then leave them in the comments section below.

Alternatively, you can get in touch via our Facebook page.

We’d love to hear from you and as always we’re happy to help.

Related Posts:

Are Auction Properties More Commonly Vacant Or Tenanted? Auction properties come in all shapes and sizes. They can be tenanted or vacant and you need to do your research to avoid any nasty surprises. For an investment property having a tenant in place can b...
Introducing Andy Thompson from SDL Auctions The first in a new series on property auctions with Andy Thompson From SDL Auctions. Auctions can be fantastic places to secure BMV deals but for the newcomer, they can be very daunting places. The tr...
What Steps Should I Take Before I Buy A Property At Auction? Before you buy a house at auction you will need to do your due diligence. This means you need to have seen the house you want to buy (preferably more than once) and you will need to understand what is...
How Do Property Auctions Work? The process of buying a house at a property auction has three distinct phases. Firstly there is the preparation period after the catalogue has come out. Second is the day of the auction, itself. And, ...
Property Auctions | What Is A Reserve Price? In a property auction, there is a guide price and a reserve price. A guide price is what a buyer will see in the auction catalogue and is a guide to the value of the sale. The reserve price, on the ot...

Leave a Reply