Why do so many buy and sell at our auctions?

Mark Gower, a partner in Allsop’s commercial auction team, reflects on the unwavering appeal of auctions and the reasons why Allsop’s clients continue to trust this method

There are of course risks in everything in life, and buying and selling at an auction is no exception. 

For sellers there is the risk of lost time and money if their property doesn’t sell and the risk of the buyer not being able to complete if it does.

For buyers there are risks surrounding auction terms and fees, lost time and money if they are not the highest bidder and some would suggest a risk of overpaying if you are!

Yet time after time Allsop Commercial Auctions see high numbers of repeat buyers and sellers.  We have been holding auctions since the 1960’s and over the past four years (three of which have been exclusively online) we have seen a total of 727 sellers sell 2,999 properties to 2,121 buyers, of which 242 sellers (33%) sold more than one property with us and 386 buyers (18%) bought more than one property from us.  

Repeat customers are key to any business.  Having shown a willingness to use a company’s services more than once, they are likely to keep doing so and encourage others to do the same.  So why do so many repeatedly use our online auctions?

Transparency and getting the basics right are key

Having worked at Allsop and in commercial auctions for almost 27 years I would suggest the answer has much to do with the fairness with which we deal with people and the openness and transparency of the process we conduct.

Brand trust is usually based on quality of products and services, public perception and the customer service experience.  Amongst other things it requires long term thinking, honesty and effective communication.

For sellers the decision to return to our auctions often centres around the relationship that’s been established and the great prices we regularly achieve, coupled with the well-known benefits of the auction process namely certainty of sale, access to a wide range of buyers, speed and transparency. 

For buyers the building of trust often starts with realistic guide prices and a comprehensive set of sales particulars which have been verified by the seller’s solicitor.  Conducting proper due diligence requires time and money, so the basics need to be there and be right to encourage the buyers to engage.

So having a trustworthy and committed seller is key. We like to act for those who are serious about selling and will disclose issues and be fair to buyers, as opposed to hiding matters in the small print, hoping to catch people out. 

Making the small print more visible

Enter stage right the addendum.  A material document which is produced by us and can change right up until the moment the property is offered.  It’s used to correct mistakes and clarify discrepancies between the sales particulars and the special conditions of sale, as well as highlight any unusual or onerous clauses being imposed on the buyer by the seller within the special conditions of sale, including excessive additional fees. 

When buying at an auction (be it property, art or cars) it is common practice for buyers to be asked to pay additional fees and these are either charged by the auctioneer or the seller.  Those charged by the auctioneer go towards the costs of holding the auction and rarely amount to more than £1,500 (inc VAT). They are clearly shown at the foot of every set of sales particulars published.  Fees that are charged by the seller are normally found within the Special Conditions of Sale and go towards their selling and legal costs. 

Ensuring a fair and level playing field

Since March 2020 our commercial auctions have been held online.  To participate bidders are required to provide their details, together with those of the buyer and the solicitor that will act on their behalf.  Anti-Money Laundering checks for the bidder and (if different) the buyer are then undertaken and once satisfied a bidder security payment is collected for each lot they wish to bid for.  It is only then that bidders are cleared to bid. 

This approach ensures a fair level playing field is created and that both parties are in a position of strength once the ‘virtual’ hammer falls.  An unconditional contract is then created that legally obliges the parties to complete the sale, and largely thanks to the efforts we go to in providing, checking and disclosing information prior to the auction it is very rare for a sale to fail to complete.  

This is by no means an exhaustive list of the risks associated with buying and selling at an auction but, by shining a spotlight on our thinking and our approach to ensuring a fair, open and transparent service is provided to all our Buyers and Sellers, it might help explain why so many trust our market leading auction service and repeatedly return to it.

Contact

Mark is a Partner in the Commercial Auction Team and has over 25 years experience in the auction market. If you are interested in selling or buying through auction, or are seeking advice on the market, please do not hesitate to get in touch with Mark.