Our response to criticism from the HomeOwners’ Alliance (HOA)

Posted on 31st October 2018 by Martin Hall

A recent report from the HomeOwners’ Alliance (HOA) was critical of some auction operators including us, as well as estate agents and highlighted confusion from buyers and sellers and not enough transparency from some agents.

The HOA raised concern over the reservation fee paid by the successful buyer.

“This must be paid upfront by the winning bidder at the auction’s close by debit or credit card or bank transfer and can be anything upwards of 2.5 per cent + VAT. There is usually a minimum reservation fee of at least £5,000 + VAT.”

The HOA continues: “And it doesn’t usually form part of the overall price paid; it’s an add-on which goes straight to the auctioneers and estate agent.”

The association indicated that estate agents stand to receive more from an auction buyer than from a traditional seller in a private treaty deal, particularly on lower-price properties.

We felt that the criticism was incorrect and uninformed, our Auction Managing Director Jamie responded with this lengthy statement:

“From the offset, IAM Sold talk through all methods of disposal with sellers; the outcome of this transparent and informative approach is that for almost two thirds of sellers, it is not the right tactic for them to sell via auction. That is a consistent metric IAM Sold have seen over nine years of trading.”

“Sellers choose the Modern Method of Auction for speed and security if in need of a guaranteed sale, or in the case where a seller wants the competitive bidding environment to maximise value. The seller also chooses the fee model – pay the reservation fee or charge their buyer. Likewise, the charging of reservation fees to buyers as a method of an upfront security payment is completely clear to all parties involved in the transaction.”

“The seller is receiving a service from two professional companies which results in the property getting sold in a time frame that suits their needs at a price that they are happy with.”

“Buyers are willing to pay a premium for speed and security and to secure the property that they want. The fees charged by IAM Sold and our partners are made clear to all parties at all points of the transaction; prior to payment they are required to read and sign a very clear and specific reservation form which again, states the cost of fees, purchase price, timescales and terms of the agreement.”

Jamie went on to highlight that a copy is available in a free-to-download pack for all properties, and that all buyers are made aware of the reservation fee and all specific terms and condition in advertising on a portal, an agency’s website or that auction platform itself.

”The pack offers more security to a buyer that they would get in a mainstream private treaty transaction because it includes copies of title and title registry, searches, property information forms and property information questionnaires, along with other documents specific to a property.”

“Fees and charges are clearly marked on the bidding platform and calculated as part of the bidding process. Buyers enter into all transactions fully aware of their obligations. Only five per cent of transactions via our online auction method falls through compared to around 30 per cent in private treaty.”

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IAM Sold Ltd is rated 4.67 stars by Reviews.co.uk based on 598 merchant reviews

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598 Reviews
Responding to your reply on my initial review. The Rental charge wasn't on the starter pack because we looked so your claim is incorrect. The reason for the delay was because the seller solicitor blatantly refused to pay the rental charge and we decided to pay it because of the time wasted, and our solicitor needed to notify our lender about this rental charge development because no one from our side knew about this until the last minute, if this rental charge was stated from the beginning the lender would have been notified earlier and it would have been sorted out earlier. The idea of putting down a non refundable deposit only gives room for yourselves , the buyer and their solicitors to treat the seller how ever they like because they have nothing to lose. When this issue started we called Iam sold and no one could tell us anything, kept putting us on hold and saying there is nothing they can do then wait. So what exactly did you do again? Its not like we had a choice to buy the house without paying the fee, so yes we paid it but that doesn't mean we enjoyed paying it because it was fair. After the fee was paid all the initial interest and treatment stopped and no one cared to resolved the issue or give us a straight answer. Anyway you asked for a review, this is how we felt. Like i said never felt this frustrated in any other purchase i have made.
Fee was just too high and i didn't feel like they did anything to warrant the fee, said house would complete soon but it completed over 6 weeks after we were told it would complete. Seller said no other fees associated with the house and all of a sudden after everything was done boom! they revealed the house had a rent charge attached to it. The most frustrating purchase i have done. Never using this auction again.
Really happy with the sale of our property. Great help, would use again!!