Modern method of auction
Author
Discussion

Pistom

Original Poster:

5,943 posts

175 months

Thursday 4th July 2024
quotequote all
Does anyone here have experience of buying through modern method of auction?

What are the pitfalls?

PhilboSE

5,291 posts

242 months

Thursday 4th July 2024
quotequote all
It’s great for the seller and agent.

It’s bad for the buyer as they pay the agent’s fees, a bunch of other inflated fees, and you’re tied in. As a buyer there’s not a single reason I can think of to recommend it.

You usually only see it used for “problem” properties.

President Merkin

4,297 posts

35 months

Thursday 4th July 2024
quotequote all
Only time it crossed my path was a mate who was all for bagging a bargain until he discovered the place was riddled with asbestos. Cursory look round the internet suggests it's great, as long as you're not a buyer.

blue_haddock

4,517 posts

83 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
It’s great for the seller and agent.

It’s bad for the buyer as they pay the agent’s fees, a bunch of other inflated fees, and you’re tied in. As a buyer there’s not a single reason I can think of to recommend it.

You usually only see it used for “problem” properties.
There are a number of agents locally to me that use this for places with issues, they seem to sit forever as no one with half a brain will touch them.

Baldchap

9,167 posts

108 months

Thursday 4th July 2024
quotequote all
Personally, I think they're as close to a scam as is legally permitted.

Absolutely zero benefits for buyers but potentially mucho costs. The final prices don't seem to be any different to what you would normally pay from the ones I have monitored.

Lots of houses out there, no need to accommodate rubbish like this.

Wacky Racer

39,829 posts

263 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
It’s great for the seller and agent.

It’s bad for the buyer as they pay the agent’s fees, a bunch of other inflated fees, and you’re tied in. As a buyer there’s not a single reason I can think of to recommend it.

You usually only see it used for “problem” properties.
Nail on the head. 100% agree with this.

MitchT

16,786 posts

225 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
You usually only see it used for “problem” properties.
Though not always. My uncle used MMoA to sell a house when he was dealing with the estate of another of my uncles. Nothing wrong with the house, I think it just made it easier from his end.

Quite a lot of properties seem to be MMoA these days. All I'd say, regarding the fees, is to engineer your bid so that the price paid, including all the fees meets your budget. I wouldn't pay all the fees on top of what I perceive to be the value of the proeprty as it would then be money for nothing.

blue_haddock

4,517 posts

83 months

Thursday 4th July 2024
quotequote all
MitchT said:
PhilboSE said:
You usually only see it used for “problem” properties.
Though not always. My uncle used MMoA to sell a house when he was dealing with the estate of another of my uncles. Nothing wrong with the house, I think it just made it easier from his end.

Quite a lot of properties seem to be MMoA these days. All I'd say, regarding the fees, is to engineer your bid so that the price paid, including all the fees meets your budget. I wouldn't pay all the fees on top of what I perceive to be the value of the proeprty as it would then be money for nothing.
Its not so much the fees themselves thats the issue, as if there was a house i was interested in i would just say my bid ix £XXX including all fees take it or leave it.

Its the fact you have to stump up the fees in advance of any survey etc and they are totally non refundable regardless of the reason for pulling out.

Puzzles

2,930 posts

127 months

Thursday 4th July 2024
quotequote all
They have to be bad for the seller too, the only way I’d do it is if the discount was huge.

r3g

3,750 posts

40 months

Thursday 4th July 2024
quotequote all
blue_haddock said:
Its the fact you have to stump up the fees in advance of any survey etc and they are totally non refundable regardless of the reason for pulling out.
This ^. Only real dumb people go to buy properties using this method. Probably first-timers who haven't read the T&Cs and don't realise they've just chucked £500+ into the nearest fire.

MajorMantra

1,584 posts

128 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
It’s great for the seller and agent.
It's not good for the seller if it puts off buyers, and it will. MMoA is a huge red flag to me and I wouldn't touch it.

Mind you, as others have pointed out, it's often used to shift problem properties, so a convenient way to filter them out...

PhilboSE

5,291 posts

242 months

Thursday 4th July 2024
quotequote all
MajorMantra said:
It's not good for the seller if it puts off buyers, and it will. MMoA is a huge red flag to me and I wouldn't touch it.
Looking at them though, it looks like the agents attach a premium to the guide price and it’s possible that some people get carried away by the term “auction” and bid too high.

They must work, otherwise agents wouldn’t use them. I agree though, huge red flag as a buyer and although I often buy houses without a survey, and it’s possible to do a lot of safety checks online (like flood risk, ground status, local developments) the concept of handing over fees and THEN finding out why it’s an MMoA puts me right off. Even if the agent were to tell me the reason is “genuine”, like a distance/quick probate sale.

Funk

26,847 posts

225 months

Thursday 4th July 2024
quotequote all
MajorMantra said:
It's not good for the seller if it puts off buyers, and it will. MMoA is a huge red flag to me and I wouldn't touch it.

Mind you, as others have pointed out, it's often used to shift problem properties, so a convenient way to filter them out...
It does. Any property I see on Rightmove etc that says this gets disregarded instantly.

Edited by Funk on Thursday 4th July 13:17

blue_haddock

4,517 posts

83 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
Looking at them though, it looks like the agents attach a premium to the guide price and it’s possible that some people get carried away by the term “auction” and bid too high.
.


All the ones i've ever seen have sat for months on rightmove, so i doubt the agents have a crazy bidding war pushing prices up.

ewanjp

456 posts

53 months

Thursday 4th July 2024
quotequote all
Basically a scam. I rule out anything being sold by this route.

leef44

4,977 posts

169 months

Thursday 4th July 2024
quotequote all
Funk said:
MajorMantra said:
It's not good for the seller if it puts off buyers, and it will. MMoA is a huge red flag to me and I wouldn't touch it.

Mind you, as others have pointed out, it's often used to shift problem properties, so a convenient way to filter them out...
It does. Any property I see on Rightmove etc that says this gets disregarded instantly.

Edited by Funk on Thursday 4th July 13:17
+1

I just ignore and move on when I read the description then find out it says MMoA. I don't want any further to do with that.

LooneyTunes

8,302 posts

174 months

Thursday 4th July 2024
quotequote all
PhilboSE said:
They must work, otherwise agents wouldn’t use them.
The agent is the ONLY party it works for, by virtue of the massively inflated fees they receive for this method of sale.

I have bought a few properties over the years and, like others on this thread, also disregard the MMA ones... but watch them appear time and time again in the "reduced price" emails that come out. In one case I've seen double digit % falls.

The main issue as a buyer is not the size of the fee (you'd just wrap it into the overall financial package) but rather the ability for third parties to cause you to lose that fee completely.

hidetheelephants

30,540 posts

209 months

Thursday 4th July 2024
quotequote all
Yep, agree with all of that; it's a grifty scam to put money in estate agents pockets that benefits no one else. Avoid.

ChocolateFrog

32,199 posts

189 months

Thursday 4th July 2024
quotequote all
Just skip over those houses whenever accidentally click on them.

Seems borderline scammy to me.

Dr Mike Oxgreen

4,323 posts

181 months

Thursday 4th July 2024
quotequote all
Borderline?