Understanding the Fees for Buyers and Sellers at Property Auctions

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  • with Andy Thompson

    Andy Thompson is the Head of Auctions (North West) for SDL Auctions who sell a wide range of residential and commercial properties on behalf of both private individuals and corporate clients across the UK.

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.

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.

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Comments

  1. We have purchased a property from yourselves seller fees is 9595.00 which is 4 more times more than what I have paid the sellers solcitors Will not pirivde me with a breakdown for the invoice.

    • Hi R Singh, just to clarify this wouldn’t have been purchased from ourselves as we are not an auction house.

      So to confirm have you purchased a property from an auction and that auction has charged a seller fee or has charged you a buyers fee ? If so if you reach out directly to the auction house and your solicitor should be able to assist with what is in your purchase contract and what fees are payable.

      Sorry we can’t help directly there

      All the best