The proof is in the pudding – an auction contract

It was a Friday afternoon, just after their viewing when a buyer submitted their offer – “on an auction contract” for immediate exchange. Their solicitor was unphased by the prospect of doing the due diligence by midday on Monday, by which point the 10% deposit arrived in the Allsop client account. The contract was indeed exchanged by an Allsop partner and the same solicitor at 8pm, before my pudding arrived!

The property in Haslemere, the price over £4.5m for a lot of “bricks and mortar” – a former Spa in substantial grounds in this picturesque Surrey town.

Whilst not every property suits being entered straight into an auction, as the process evolves we are expanding the boundaries of what we sell as buyers and sellers evolve.

Assets previously not considered traditional auction lots are being transacted on the auction contract. Lot size has a part to play, The Lady Magazine building in Covent Garden still holds her head highest at £12.4m under the gavel and a parade in Ruislip holds the more contemporary digital title at over £10.5m.  Some assets may benefit from being on the market a little longer, in a predominantly cash buying market an auction backstop can prove mighty effective. It is why we are seeing a rising average lot size, including shopping centre investments sold this way.

The auction contract works whether as an auction closing tool or following longer private treaty marketing creating a Hybrid Sale as in the case with Haslemere.

It appeals to buyers and sellers. Sellers can of course dictate the terms of this standardised contract. Whilst this is not carte blanche, the template references RICS General Conditions and our standard form of purchase agreement which streamlines the due diligence process. In addition, Allsop often help to smooth out any discrepancies along the way so that it is in an acceptable form.

Speed. As long as the legal pack and information is complete, the ability to sign immediately is empowering to all parties. The buyers who can edge their competitors unequivocally, the sellers who benefit from the absolute performance of a ready, willing and able buyer, and indeed us as agents having complete control of the process from the collection of the deposit to signing of the binding documents. We harness all the feedback generated from those willing buyers to ensure the transaction is as swift and stress-free as possible.

Covid has perhaps accelerated the digital transformation, contracts are signed on our screens following ID/AML checks and sent to buyer and seller sides immediately.

Any good agent knows that there are a number of parts that make up a successful sale. Pricing, market access, a complete and accurate legal pack, a clear deadline and the scent of the deal.

The Auction contract ties this all together to which we attribute much of our sales success as we have doubled our market share in the last twelve months.

Sometimes it all happens too quickly, but pudding can always wait!

The next online-only commercial property auction will take place on 23rd March.