What is a buyer’s premium?

When buying through auction it is extremely common that a buyer’s premium fee is payable on the fall of the gavel.

People often hear all these separate fee’s and wonder if buying at auction really is as profitable as others say, and honestly, do your due diligence and it is.

We sold a flat in Crawley, West Sussex recently for £130,000(including fees) and after a refurb throughout costing a mere £13,000 the sale value was £220,000. A huge profit of £77,000! Now not all profits are as substantial but the proof is in the pudding.

Welcome to Connect UK’s Auction Academy – Here to answer all your property auction questions.

A buyer’s premium is a separate charge alongside the hammer price of a lot. The winning bidder of the property or land will be required to pay this premium as well as the property deposit (usually between 5-10%) when the hammer falls on the day of the auction.

This is also when the exchange of contacts takes place.

The exact fee payable can be found alongside every advertisement of the lot. Whether this be on our own website, Rightmove or any other portal, the buyer’s premium will be clearly displayed for all to see.

Check out our other videos where we discuss auction legal packs and proxy bidding.

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