How can local agents take a share of the multi-billion pound UK property auction market?
24 January 2018 1571 Views
Here’s how the LetsBid Property team is helping them do it.
A new property platform called LetsBid has launched in the UK and is bucking the trend, backing the UK’s estate and letting agents rather than going direct to consumers. Looking at Q1 2018, there are now hundreds of property auctions taking place across the UK with thousands of properties offered for sale. Many are achieving success rates of 70% and above, which make them an attractive option for sellers who are looking to sell property fast.
There is a common myth that all the properties sold via auction are repossessions or problem properties, but this is far from the truth. Many estate agents and sellers are just fed up of accepting an offer for a property, only for the deal to fall through simply because the buyers have changed their minds or the ever-growing chain has broken.
Instead, they are instructing property auctions to sell. If you speak to any UK estate agent, abortive sales have got to be within the top 3 problems they face. This is why many agents explain to their sellers that it’s sometimes not just about backing the highest bid; it’s about combining that with the right buyer. Property auctions achieve this by offering sellers speed, transparency and (as the buyers are financially committed) some certainty.
The traditional auction market has always been quite daunting for both sellers and buyers as none of them really know what to expect on the day. While it has its advantages, you really need to do your homework if you’re a buyer to ensure what you’re buying meets your requirements. If not, it can cause you a significant financial loss.
The same applies to sellers. You want to make sure you’re getting the best value for your property in the current market conditions and you want to make sure it has the right exposure and timings to make that happen.
LetsBid Property believes the modern method of auction gives buyers and sellers all this and more. LetsBid allows the agent to list the property for sale via auction through all the usual property portals, just like a traditional auction would. LetsBid also enables agents to email their database, letting them know of the instruction.
The difference is agents are in control of the whole process. If they have loaded a full legal pack and have several interested parties who are willing to exchange now with a full 10% deposit, they have that option. Or they can choose to use the modern method of auction and charge the buyer a reservation fee (typically between 1-3%). This then gives the buyer a 28 day period to get their finances in place to allow them to exchange contracts.
In the unlikely circumstance of them not exchanging within that period, they forfeit their reservation fee. If they do exchange, the reservation fee is deducted from the 10% deposit.
This helps give the agent assurances that they have a committed buyer and also gives buyers assurances they have secured the property.
LetsBid Property believes local agents are best placed to serve this market, helping open up the auction sector to a much wider audience. It does this by eliminating the fear for buyers of losing their 10% deposit, with some purchasers concerned that they don’t have time to secure the required finance. It also helps estate agents to not lose instructions on aborted sales.
What’s more, unlike other companies, LetsBid Property does not charge the buyer or agent any commission. They simply run a subscription service.
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