Property auctions offer a fast, transparent way to buy or sell real estate in the UK. However, one of the most commonly asked questions is: who pays the auction fees—the buyer or the seller? The answer depends on the auction house’s terms, the method of sale, and any special conditions attached to the property. This guide explains how auction fees are structured, what buyers and sellers should expect, and how Fraser Bond supports clients through auction acquisitions and disposals.
General Overview: Who Pays Auction Fees?
In UK property auctions, both buyers and sellers may incur fees, but the buyer typically bears the majority of the auction-related charges, depending on the auctioneer and the type of sale.
Auction Fees for Buyers
1. Buyer’s Premium / Buyer’s Fee
- A non-refundable fee paid by the buyer to the auctioneer upon winning the bid.
- Typically 1% to 2% of the purchase price or a fixed fee (e.g., £1,000–£5,000 + VAT).
- Detailed in the auction catalogue or special conditions.
2. Administration/Reservation Fees (Modern Method Auctions)
- In online or modern method auctions, buyers may pay a reservation fee (often 5% or a fixed amount) which may or may not be deductible from the final price.
- This secures the property and prevents further marketing.
3. Legal Pack Fees
- Some auctioneers charge buyers to access the legal pack, though this is often covered by the seller.
Auction Fees for Sellers
1. Entry Fees
- Sellers often pay a catalogue entry fee or marketing fee to list the property in the auction.
- Typically £250 to £1,000 + VAT, depending on the auctioneer.
2. Commission
- Some auctions charge the seller a commission on the final sale price (e.g., 1% to 2.5% + VAT).
- In buyer-pays-all models, sellers may pay no commission.
3. Legal and Conveyancing Fees
- Sellers are responsible for preparing the legal pack, which includes title documents, searches, and special conditions.
- Costs typically £300 to £600.
Key Differences: Traditional vs. Modern Method Auctions
| Traditional Auctions |
Modern Method Auctions |
| Exchange occurs immediately at the fall of the hammer |
Buyer secures property with a reservation fee |
| Buyer pays buyer’s premium |
Buyer pays reservation fee |
| Seller may pay entry and commission fees |
Seller may pay reduced or no commission |
Risks and Considerations for Buyers
- Auction fees are payable even if financing falls through—buyers must be financially prepared.
- Due diligence is critical—legal packs should be reviewed by a solicitor.
- Non-refundable fees must be factored into total acquisition costs.
How Fraser Bond Can Help
Fraser Bond provides comprehensive auction advisory services:
- Auction Representation: Bidding on your behalf to secure assets efficiently.
- Due Diligence Support: Legal pack review and valuation assessments.
- Fee Analysis: Clear breakdown of buyer/seller costs and guidance on negotiating terms.
- Post-Auction Management: From completion coordination to asset management.
With expertise in traditional and modern auction methods, Fraser Bond ensures clients make informed decisions, avoid costly pitfalls, and maximise value.
Conclusion
In UK property auctions, buyers typically pay auction fees, including buyer’s premiums or reservation fees, while sellers may pay entry and legal costs. However, fee structures vary, making due diligence essential. Fraser Bond supports clients through every stage of the auction process, ensuring clarity, compliance, and optimal outcomes.
