 |
|
|
 
GUIDANCE NOTES FOR ESTATE AGENTS
With the advent of Home Information Packs just around the corner, every property will soon have to have the typical legal pack normally needed to be prepared for an auction...just to be offered for sale
Nethouseprices on-line Property Auctions can be a wonderful additional marketing tool to enable you, as an agent, to take full advantage of this imminent change.
Here are the 10 simple steps needed to achieve a successful on-line auction result:
1) Take instructions on suitable property and agree your own fees with client
2) Register FREE with Nethouseauctions
3) Download our standard Agency Agreement
4) Return signed copy to us with agreed Guide Price and Auction Date
5) Upload Property Details onto Nethouseauctions and begin 6 week marketing period
6) Check that Sellers Solicitors prepare auction legal pack within first 2 weeks
7) Check that Seller pre-signs their copy of the Auction Contract
8) Advertise in local press, carry out viewings, etc. in usual way
9) Assist and encourage potential Bidders to register
10) Ensure Reserve Price Agreement is returned to us 2 days before auction
The following notes are aimed at providing further guidance for any agent considering offering a property for sale in this way.
A guaranteed exchange?
The benefit of auctions over private treaty sales are because all the legal work and financial arrangements are sorted out before the auction takes place. On-line auctions are no different. A nethouseauctions seller pre-signs their copy of the contract (as opposed to the auctioneer) and all bidders must pre-register by pre-signing their contract and paying their solicitor a pre-contract deposit, enabling an exchange of contracts to take place with the successful bidder at the end of the auction.
Please click to "How it works" on the main Auction website for a fuller explanation of the basic concept.
What properties are suitable?
Any property that is unusual in some way, or may generate exceptional interest would be suitable to take to auction.
- properties in need of renovation
- repossessed properties
- tenanted flats or houses
- building land
- residential, commercial and industrial investments.
Standard well-presented family homes would not usually be appropriate, unless there are exceptional circumstances such as disputes, Court Orders or a dire need to release cash quickly
In certain circumstances, situations where there is huge interest in a property that would otherwise have gone to a Formal Tender or Best Bids situation may also be appropriate.
Should you wish to discuss any property you consider may be suitable please contact us at auctions@nethouseprices.com
Commission Structure
Here is the best news - at present, our involvement is absolutely FREE. There is no Entry Fee. Nor do we charge you the agent, or your client any commission, whatsoever!
You will charge your clients typically 2% plus VAT. We only require you to download our Agency Agreement and obtain a signed copy from your clients agreeing to enter into a binding contract to sell their property.
We do not make any charges to your client, however we do charge the successful buyer a Buyers Premium of £250 (including VAT) to cover our costs.
Agency Agreement
Once the property has been identified as suitable to auction, you will need to obtain your clients formal instructions by getting them to sign our standard Agency Agreement which is downloadable from our site and send this back to Nethouseprices via fax or post, details of which can be found on the form. You may have your own standard agreement, but you must use our agreement as well.
Marketing
When registering your property to sell at auction, an auction date will be agreed - to finish at a specific time and date (for example - 3.00 pm on Wednesday 18th April) - usually allowing a 6 - week marketing period.
As the sole selling agent, you will take particulars of the property and will market the property in the usual way with "For Sale" boards (with For Auction stickers), window displays and on the nethouseauctions website. We would recommend that you place (at you own/clients expense) at least 2 advertisements in your local newspapers, giving details of the auction etc. and incorporating the nethouseprices logo.
Typically, the main Auction Houses issue some 25,000 catalogues per sale. This inevitably gives the properties fantastic exposure to a wide audience. However, with over 2 million hits per day, a "mailing list" of over 150,000 interested applicants and with our own advertising in trade related magazines and papers, we believe nethouseauctions can exceed this publicity.
Viewings
You will carry out arrangements for viewings on the property in the usual way, although you may wish to arrange a series of block viewings, depending on the demand.
Guide Price
At the time of confirmation of instructions, you will need to agree a Guide Price with the Seller so that this can be advertised at an early stage on the website. We suggest a figure some 10% - 15% below the expected final sale figure.
Pre-registration and Commitment Fees
All prospective purchasers must register in advance of the auction as a Bidder by paying a Commitment Fee to their solicitors and pre-signing the Auction Contract.
This Commitment Fee comprises two elements- a Pre-contract Deposit of 5% of the Guide Price or £2,000 (whichever is the greater) plus the Buyers Premium of £250- and the exact amount of this fee must be incorporated within your sales details of the property advertised on this site.
This Pre-contract Deposit will become the contractual deposit upon exchange of contracts.
All unsuccessful bidders will be refunded their Commitment Fees (Pre-contract Deposit and Buyers Premium) by their solicitor.
Pre-signed Contract by the Seller
As we have a group of committed bidders, so we need a committed seller. We therefore require the Sellers Solicitor to send to Nethouseauctions an undertaking that they have a signed contract and/or authority to exchange with the highest bidder at or above the Reserve Price within 24 hours of the end of the auction.
Reserve Price
You will need to agree a Reserve Price with the Vendor towards the end of the marketing period, when you have had the opportunity of gauging the interest shown in the property.
It will be the responsibility of the Seller to complete and fax or post back this standard Reserve Price Agreement, which can be downloaded from the Sellers Solicitor Guide pages. Please ensure your client does this at least 48 hours prior to the auction
Sales Prior to the Auction
As in any auction situation, you may receive bids prior to the auction taking place. You obviously have your statutory obligation to report any such bids to your client in the normal way, and no doubt, you can make your recommendation based on the response already received.
Your client's solicitor should have already prepared a complete legal pack and sale contract, enabling an immediate exchange to take place, should the offer be acceptable.
You must inform Nethouseauctions immediately if an offer is accepted, so that the appropriate notices can be issued on-site, once contracts have been exchanged.
To avoid any confusion, no offers within 24 hours of the auction time and date will be allowed.
Sales Post Auction
Should the bidding fail to reach the reserve, sales can often take place up to 6 weeks after the auction. You would therefore be well advised to agree your sole agency agreement to cover this period.
Potential Bidders
You will probably have dealings with most of the potential purchasers, in the usual way through viewings, enquiries, etc. It is obviously in everyone's interest to have as many potential bidders as possible, and you may be called upon to help them to register as a Bidder as explained in Step 5 of "How it Works" on the main Auction pages.
They will have to lodge a Commitment Deposit with their solicitors, pre-sign the Auction Contract and will be able to bid either manually or automatically (where Nethouseauctions bids on their behalf) up to their maximum bid specified.
Please familiarise yourself with the procedure in the event any potential purchasers require assistance.
The Auction
The auction bidding will take place as described in Step 16 and 17 of "How it Works". It will last for a period of 24 hours ending at the specified time and date of the auction. There will then ensue a period of "Sudden Death" bidding ending 45 seconds after the last bid is received.
As both parties will have pre-signed the Auction Contract, an exchange can take place as soon as the auction finishes.
What to do next ?
Advertising your properties with Nethouseauctions is absolutely FREE. You will need to first register yourself as an agent on the Nethouseauctions site and then you can upload details of the property for auction. Please note that even if you have registered before on the main Nethouseprices pages, you will still need to register to advertise your properties via auction. Click here to Register.
|
|
|
