A company that connects online auctions with willing agents to operate on them, has stood up to a consumer group which has accused the firm of being "murky" and "milking buyers for profits." Serious allegations that could hurt the company in the long-term.
IAM Sold, which works with 1,900 estate agency branches, says the report from the HomeOwners’ Alliance and which was sharply critical of some auction operators and agents - highlights “confusion from buyers and sellers, and evidently, not enough transparency from some agents.”
The HOA is concerned at what it regards as the high and often under-publicized reservation fee paid by the successful purchaser.
“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 percent + VAT. There is usually a minimum reservation fee of at least £5,000 + VAT.”
The HOA continues: “And it [the reservation fee] 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 says the fee - even if shared equally between agent and auction platform - means the agent stands to receive more from an auction buyer than from a traditional seller in a private treaty deal, particularly on lower-priced properties.
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