Auctions on-line, taking more on trust than in the old days.
13 May 2026(2025-May: LinkedIn) Auctions on-line: a worrying trend: taking more on trust than in the old days.
In the old days, not that long ago, auctions were held in rooms: a combination of prospective bidders physically present and telephone bidders. Part of an auctioneer’s job is to get the bidding started and continuing even if imaginary. The advantage of presence enabled others to see the bidding by bidders putting their hands up (or regular buyers a physical signal known to the auctioneer, such as a nod) With no need to register beforehand, impulse bidding possible. Auction fever common, buyers carried away by the excitement into overpaying. (When I lived in London, I sold my house, a thatched cottage, at auction: the auctioneer got the only bidder in the room to bid against herself up to the reserve price.) On the fall of the hammer an auction lot is sold subject to the buyer signing the auction memorandum (binding contract) and paying the deposit, normally 10%. An auctioneer’s assistant would get the buyer to do that straightaway. It was still possible for the buyer to do a runner immediately, but unusual. It was also possible for a buyer to fail to complete and lose the deposit, but at least the seller got 10%. Once upon a time, completion was 4 weeks. It became extended to enable buyers to get loans arranged.
Auctions on-line only have a different dynamic. A bidder has to be registered beforehand, usually the day before, (usually before 6pm – auctioneers go home early!). There may be other reasons for the seller withdrawing, but in any event no registered bidders means on the day of the auction the property is withdrawn.
At auction on-line, there are.only three ways to buy without being a registered bidder: prior to auction, after no sale at the auction, someone else registering as the bidder, be the winning bid to purposely jeopardise the sale, fail to sign the memo and pay a deposit, and hope to get it for less after the auction.
An auctioneer is authorised to sign the memorandum on behalf of both parties, but zero deposit. Although a memorandum is a binding contract, without a deposit, nothing for the seller to get without taking the buyer to court incurring the extra costs to begin with.
Auctioneers can blacklist time-wasters and do: Word gets round. But for credibility such buyers buy occasionally so difficult to prove. Sellers are none the wiser until after the event.
Selling prior is about judicious choice. Where the offer is above the reserve, and more than one offer prior, it doesn’t follow the highest is best choice. Allowing an accepted offer time to sign the auction contract and pay the deposit eats into the time remaining between acceptance and the auction. I have been a seller at auction twice. Once my own house, the second an executor not prior – In the room were several bidders and win completed. As an adviser to clients selling at auction, lots of times, including prior. Greed versus caution? After due diligence, gut-feeling best.
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