A new online auction service has launched this week, pledging a fairer service for agent partners, as well as buyers and sellers.
My Auction is distancing itself from the Modern Method of Auction (MMA), which has been controversial due to a perceived lack of transparency and high buyers' fees.
The service has been launched by Stuart Collar-Brown and Todd Harrison-Moore, two property professionals with 25 years of combined industry experience.
Collar-Brown previously worked for Pattinson Auctions, while Harrison-Moore has worked for a number of property investment firms.
The new service claims to address a number of issues raised in both traditional and online conditional auctions.
It says it will only charge property buyers a fee of 1% + VAT (set at a minimum of £2,000 + VAT), compared to the 6% fees faced by some buyers using MMA.
Winning bidders will be expected to pay a 5% non-refundable deposit and then the remaining 95% of the purchase price 20 working days after contracts have exchanged.
The firm says that purchasing a £250,000 property through one of its auctions would cost the buyer £3,000 including VAT for the security of exchanging contracts immediately, compared to up to £15,000 with other online conditional auction services.
Collar-Brown tells Estate Agent Today that he believes MMA to be a 'glorified option agreement with very little security for the seller'.
"I’m a true auctioneer at heart and auctioneers exchange contracts on the fall of the gavel – whether that’s in a room or a digital gavel," he says.
He explains that with the MMA there is no legal exchange of contracts, meaning that after 28 days the buyer can walk away.
"Yes, they’ll lose their 'reservation fee' but if it was sold in the traditional method, the buyer would lose 10% of the value of the property and their reservation fee so are less likely to walk away from a deal," he explains.
What's more, My Auction says it doesn't tie agents into lengthy contracts. It concedes it won't be able to offer agents 2.5% auction fees but will allow them to keep 100% of the fee they agree with vendors, getting paid within four weeks.
Agents who use the service will promote vendors' properties via the portals, while My Auction will also list it on the specialist auction portal Essential Information Group which targets around 20,000 auction buyers each week.
The new service says that one of the issues with traditional auctions is that they provide sellers with a limited number of dates and events to sell their property. It says it will be addressing this by carrying out a weekly online auction.
"The reason we have created the company is because [we] feel there is a much fairer and more flexible way to auction properties in the UK," says Collar-Brown.
"Our mission is to create a fair and flexible marketplace with both buyers and sellers in mind."
"[We] have worked in live and online auctions for the past 12 years and we’ve combined all of the best practices of both formats without the high buyers' expenses for online auctions and the restrictions on timescales for sellers in the live room," he says.
"Some properties and sellers will 100% sell better in an auction environment because of the types of buyers we deal with every day so my job is to try and find these sellers and offer them this service for the same amount it would cost them to sell on the open market."
"[We] can do it in four weeks, with a less than 1% chance of falling through and they can have their money in the bank in full within 56 days from going on the market," Collar-Brown concludes.
My Auction’s first online auction is set to take place on Wednesday October 23 at 12pm. You can see its website here.