Humberts is the latest estate agency to announce that it’s going to offer customers the controversial Modern Method of Auction option.
The Modern Method of Auction, also known as a conditional auction, allows prospective buyers to place bids on a property within a given timeframe. At the end of the auction, the highest bidder is required to pay a reservation fee to secure the property.
The buyer then has 28 days to exchange and a further 28 days to complete.
The fledgling sector has been criticised for an alleged lack of transparency over the non-refundable reservation fees paid by purchasers, which often cost around £5,000 plus VAT or five per cent of the agreed purchase price.
Tim Simmons, Humberts chief executive, describes the option as “a great way to further increase our spectrum of services whilst at the same time staying at the forefront of innovation.”
He continues: “The traditional auction room environment is way outside the comfort zone of most of our clients, but this exciting method offers the best of both worlds namely a full and comprehensive marketing programme as well as a brilliant and secure method of securing a completed sale without the trauma of an auction room.”
The company being used by Humberts is Whoobid, which says it already has a network of over 200 agency branches across the UK.
In the Humberts deal, vendors will be able to choose from both the traditional auction with instant exchange or MMA.
Whoobid claims its auctions offer purchasers “100 per cent transparency with all information and searches collated into auctions packs, allowing bidders to make an informed decision quickly on a purchase.”
Earlier this year The Property Ombudsman amended its guidelines to insist that agents should explain both the benefits and disadvantages of their recommended MMA at market appraisal stage.
Since that time the largest MMA provider, IamSold, has produced a best practice guide for the sales technique, backed by The Property Ombudsman, NAEA Propertymark and Essential Information Group.