Commission When Buying at Auction

Buying at auction is becoming more and more popular, especially as the housing market is struggling as a result of the credit crunch. Sellers sell at auction to offload there properties quickly when they do not want to hold on to them. This is common; therefore, with lenders who have repossessed properties and want to get rid of them quickly. With the economy in a state due to the repercussions from the mortgages problems in the United States, repossessions are on the increase and therefore there are bargains to be had at auction.

When selling at auction the seller is able to get the quick, no fuss sale they want. The sale must be completed within 30 days so the seller can be assured of an efficient sale. However in order to get this they will have to make some financial sacrifices. For example they will firstly have to make the price of the property competitive. Most people go to auctions for a bargain so the seller must be aware of this. This means they may have to compromise on the price they would want to sell at.

The seller will also have to pay some fees to the auction house to contribute towards marketing costs. The auction must be advertised and the properties marketed well in order to get the right potential buyers to arrive.

Commission When Selling At Auction

When selling at auction the seller will also have to pay a commission fee to the auction house. The auction house takes care of all the work involved with selling a property and therefore expects some pay for this. This is how they make their money. The commission differs between 1% and 3 %.

Commission When Buying At Auction

When buying at auction you do not have to pay a commission. The commission is between the seller and the auction house and the buyer does not have to pay anything else. What they buyer does have to pay though is a deposit of 10% on the day of the sale. The buyer must bring this deposit with them to the sale or they cannot enter into the sale.

The sale is a legally binding agreement and the buyer must pay the remaining money within 30 days of the sale. It is for this reason that auctions are so appealing to sellers who want to get rid of the house as quickly as possible. Lenders do not want properties on their books so if they repossess properties they want to move them on quickly.

Buying at auction can be a great way to get a property at a bargain price. What the buyer needs to remember is buying property whether at auction or not is a serious business. They should not get too caught up in the excitement of auction and make a bid they cannot keep. Stick to a budget and make sure you do not exceed that. If you are sensible though you could leave with a great house and a great price.