Zoopla has entered into a partnership with an online platform to promote the so-called Modern Method of Auction option to estate agents.
The portal is to launch a marketing campaign later this year to “highlight the benefits auctions bring to both buyers and sellers” as part of its link with iamsold, the UK’s largest property auction house.
Zoopla - which describes this as an industry-first - says its work in the coming months will help agents expand their activities to embrace online auctions and will also “educate homemovers.”
MMA has been criticised in the past by groups such as the HomeOwners Alliance for its high fees, usually paid by the purchasers.
MMA 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 by some 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.
iamsold, which already has links with some 2,500 agency branches even before the Zoopla partnership, has developed what it calls a ‘Best Practice Guide’ outlining the the code of conduct for those agents offering MMA.
Currently, only two per cent of property transactions in the UK are completed via auction but Zoopla says this type of disposal enjoys high completion rates compared to traditional sales, 25 per cent of which fall through, costing sellers £400 million in fees, and jeopardising millions of pounds in agent commission.
A statement from Zoopla says that “in contrast, the Modern Method of Auction, where the whole process is completed online, offers a range of benefits for both agents and homemovers alike.” The portal claims MMA secures a completion rate of around 95 per cent.
“Our mission at Zoopla is to be the agents’ champion and by partnering with iamsold we believe we are doing just that. Our research shows property auctions are misunderstood by many agents and consumers alike but we are confident that in iamsold we have a partner that can help us bring auctions to a whole new generation of homebuyers who might have only ever seen them on TV” says Andrew Marshall, Zoopla’s chief commercial officer.
“The benefits of selling at auction for agents are clear. Faster sales, higher completion rates leading to an increased rate of return. It’s also a great way to bring to the fore properties that might have previously struggled to get the attention they deserve. We firmly believe that all of this, combined with Zoopla’s reach and recognition, will be a winning combination for agents in the months and years ahead.”