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Who Pays Auction Fees: The Buyer or Seller? Find out here.

Sam Kinloch

Any reputable auctioneer will ensure buyers and sellers have full oversight of the fees and commissions linked with an auction sale - so who pays auction fees? We discuss all of these details before listing a property for auction, with comprehensive guidance for sellers within each legal pack.

Auction fees are often a concern for those who are unsure how payments work or assume that commissions will add a significant amount to their costs. We make the auction process transparent and straightforward so that all parties can proceed with confidence.

We’ve written a detailed guide on the cost to sell at auction here, but in this article, we’ve broken down the fees that you will pay as well as the fees that auction buyers will pay to explain what the likely costs will be so you can make informed decisions about your intended property sale or purchase.

Need help to find out which fees you will pay? Please get in touch via this form at any time if you would like any further assistance calculating the total costs of buying or selling property at auction.

Who Pays Auction Fees: The Buyer or Seller? Find out here.

Auction Fees for Property Buyers

The first step for any prospective auction bidder is to assess the guide price and administrative fees, and any other cost considerations, all of which are outlined in the legal pack.

This package of documents is a key aspect of buying at auction and details the terms and conditions of the sale, the guide price agreed upon between the seller and auctioneer, and the specifics, such as copies of the title deeds and any covenants or restrictions on the way the property can be used or modified. Below we work through each cost element step by step.

The hammer price is the final bid accepted by the auctioneer when the sale ends. Provided the highest bid is at the reserve or above it, the deal will be binding, and the amount will be contractually agreed – it cannot change from this point onward as the exchange of contracts is completed on the fall of the hammer.

Administrative Fees

Admin fees cover the cost of managing the auction sale. We have a fixed, tiered administrative fee structure which is designed to be simple and includes VAT for the avoidance of doubt.

Our current admin fees work like this:

Sale Price at AuctionTotal Admin Fee
Up to £29,999£750
£30,000 - £99,999£1,250
£100,000 - £249,999£1,750
£250,000 - £499,999£2,250
£500,000 - £749,999£3,500
£750,000 and above£5,000

Note that administrative fees apply to each individual lot. If a buyer successfully bids on two separate properties within the same auction, the admin fee will be calculated per lot, with a VAT receipt issued for the buyer’s records. More information about our buyer fees are outlined here. 

Who Pays Auction Fees: The Buyer or Seller? Find out here.

Additional Expenses

Some sellers include clauses within the legal pack that require a buyer to contribute to their selling costs – this isn't always the case, but we recommend every buyer read the legal pack thoroughly before bidding as a due diligence exercise.

While much depends on the nature of the sale and property and whether the seller is a private individual, there is the potential for extra costs to include contributions towards the auction marketing costs or the seller's legal fees or search fees.

The legal packs are prepared and made available for potential bidders to download online itemise other potential costs such as VAT, where applicable, Land Registry charges and Stamp Duty.

VAT on Property Purchases

While VAT, or sales tax, does not apply to residential properties, it may apply to commercial premises and is normally calculated against the total payable by the buyer, including additional charges.

Generally, VAT is only a consideration where the property is being sold at auction on behalf of a VAT-registered entity, such as an incorporated company or a developer who is registered as a VAT-paying business and will also depend on whether the property has been elected for VAT

As always, you can check these details within the legal pack before deciding whether to bid. Many investors and developers are themselves VAT registered, in which case VAT paid against the purchase of the property may be used to offset VAT collected through other activities.

We recommend commercial buyers or those purchasing from a commercial vendor seek independent advice for further information about their tax position or VAT liability.

Auction Fees for Property Sellers

Selling a property by auction will incur a slightly different set of fees. Similarly to the listing fee payable for a private treaty sale, sellers are asked to remit a standard payment, which covers the cost of managing the online auction process.

Auction expenses are payable upfront. . This system is the industry standard and works very much like the payments made to an alternative property selling agent, with VAT included.

Marketing fees may be included within the entry price, although depending on the property and whether you require any specialist marketing activities to drive interest in the auction or advertise your lot to certain buyer groups, there may be an additional cost.

As the auctioneer, we handle every aspect of the marketing, from advertising the property to a targeted buyer demographic to putting together images, diagrams, video walk-throughs and property particulars for the listing.

selling house by action

Sales Commission on Auction Property Sales

Commissions are payable once the contract has exchanged and are deducted from the final balance before this is transferred from the buyer to the seller by the auctioneer or directed to their conveyancer or solicitor as appropriate.

The broad scope of property types and locations sold at auction means that commissions are agreed on a case-by-case basis and might, for example, vary between a residential property and an unusual development, a commercial building and an empty plot of land.

However, we can offer complimentary appraisals of any prospective auction lot in person, offering guidance about the anticipated commission basis and professional advice about what we might expect the lot to achieve in a live auction.

Conveyancing Fees

Finally, it is important that sellers build conveyancing fees into their budgets since a property sale will normally require a solicitor or conveyancer to manage the legal aspects of the transaction, such as running searches on the property and registering changes to the title deeds. These costs can also vary with the complexity of the property and transaction.

Related reading: Do I need a solicitor to sell my property at auction?

If you are deciding whether to list your property for sale at auction or are interested in bidding for a residence due to become available in a forthcoming auction event, all fees and costs are either agreed upon in advance or listed within the legal pack for you to peruse at your convenience.

Need help to find out which fees you will pay? Please get in touch at any time if you would like any further assistance calculating the total costs of buying or selling a property at auction.

About the Author

Sam Kinloch

Sam Kinloch

Director & Senior Auction Appraiser

Sam’s career in the dizzy world of property auctions began when he hung up his chainsaw and headed in from the forest. Joining the team in 2003 Sam now sits on the Board of Directors and has been instrumental in the adoption of online auction services.
Out of the office you can find him flying around the velodrome or sipping coffee at a local café.

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07968 780714

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