Auctions Jargon Buster
If you're interested in property auctions, but don't know much about this method of purchasing property, we have compiled a list of some of the most common terms you may come across.
The term Dutch auction originates from Dutch flower auctions. It is a process where the auctioneer starts at a high price before lowering the price until the property sells. There is no competitive bidding in a Dutch auction, as the first bid taken will be accepted and the property sold.
The gavel is a small ceremonial mallet commonly made of hardwood. It is used as a symbol of authority and the right to act officially. The fall of the gavel (hammer) indicates that an item has been sold in an auction.
We aim to set a property's guide price at a realistic level, based upon market evidence, in order to provide prospective purchasers with an indication of what we believe it is worth. However it should be noted, that it is not uncommon for lots to sell in excess of the guide prices quoted in an auction catalogue.
The legal pack will usually contain a property's Land Registry entry, including a copy of the title plan, draft transfer, local searches, special conditions of sale, property information forms, fittings and contents form, Home Information Packs and any other relevant documents. Potential bidders should seek out the legal pack prior to bidding in an auction, as this is a buyer's only chance to examine more specific details on a property and the terms of the sale before the fall of the hammer.
The practice of a bidder putting in a sealed bid on a property because they are unable to attend the auction in person. The proxy bid will need to be received by the auctioneers prior to the auction and will need to detail the bidder's maximum bid price. The auctioneer will only open this sealed bid whilst up on the rostrum and will bid on the proxy bidders behalf.
The reserve price is the lowest amount for which a property will be sold. This is never an amount in excess of the guide price and it is rarely disclosed. Very occasionally, the property is sold subject to a declared reserve which is publicised during the marketing campaign. The reserve price is simply put in place to protect the vendor's position.
The auctioneer will often have a spotter, who will stand next to the auctioneer looking at parts of the room the auctioneer is not covering at any particular time. The auctioneer may not wish to look away from the bidder when he is in the process of 'knocking down' a property, and thus relies on the spotter to identify any further bids in the room.
Kit has been working in the area for over 30 years and specialises in rural agency across the South West, to include country houses, farms, estates and development land. In addition, Kit carries o...