Most people selling their homes see traditional ‘ballroom’ auctions as the preserve of investors and landlords, an image reinforced by TV programmes like Homes Under The Hammer.
These promote the image of auctions as fast-paced and competitive places to sell or buy a property and suitable only for quick-deal scenarios, such as probate sales or for properties in need of significant work.
But a relatively new auction model is gaining traction, after Newcastle-based auction house iamsold pioneered its more widespread use.
Called the Modern Method of Auction (MMoA) and conducted online, it offers a range of benefits. It’s a new string to agents’ bows, but also a low-cost option for vendors and a new way to buy homes for consumers.
It mixes the traditional auction model with the flexibility of a private treaty sale, all without the need to travel to a ballroom.
Buyers are given 56 instead of 28 days to complete on the deal post-auction – crucially, enough time for them to arrange a mortgage.
Our partnership with iamsold means you can bring all of MMoA’s benefits to your buyers and sellers. Get in touch to find out more.
Agents earn a minimum of £2,500 per sale via iamsold (an average of 1.75% of transaction value) and are more likely to receive their commission sooner than a private treaty sale, which can take up to 16 weeks.
Vendors are attracted to the idea of selling their property at zero cost – because at iamsold, it’s the successful bidder who pays the fee of £5,000 plus VAT.
The COVID-19 lockdown has helped push MMoA into the limelight.
While many agents saw their sales diminish to a trickle during lockdown, many of the 2,000 branches using iamsold carried on selling homes via its online auctions.
“The market has seen a rise in non-discretionary sellers post-lockdown, who require a quick, hassle-free and secure way to move more than ever, so we’re finding that MMoA has never been a more valuable solution for our agents to go to their clients with,” said Jamie Cooke, managing director at iamsold.
“Pre-lockdown, MMoA was little known among the public, with just over a quarter of the UK homeowners we surveyed earlier this year aware of it – although 46% said they would be ‘likely’ to consider auction as an option for buying or selling a property in the future.
“In June, the first full month after restrictions were lifted, sales were up by 20% and viewings were up by 22% compared to this time last year.
“Our figures for July so far show that these trends are continuing, as MMoA is proving a preferred and valuable solution for many movers post-lockdown.”
40% of Chris’s agency’s sales came from iamsold during lockdown, but McKnight thinks this may reduce once people return to their traditional ‘private treaty’ habits once again.
Nevertheless, MMoA helped McKnight earn commission when the market was in lockdown, most memorably from one property in particular. The house was bought unseen following a 50-bid virtual auction, although he says they did offer video tours for the property.
“Most of these buyers were not investors – it was a property in need of work but in a good area, and it was a month into lockdown when traditional stock was thin on the ground,” he said.
“Having that kind of sale was a plus for our turnover – our average fee in the open market is £1,500 but we get £2,500 from iamsold sales.”
The MMoA has helped agents, vendors and buyers look at auctions in a fresh light helped, in part, by the many challenges faced by the housing market during COVID-19.
And once the world returns to ‘normal’, auctions may no longer seem the landlords-only territory they used to be.
Author: Nigel Lewis, property journalist