A company that uses the ‘modern method’ auctions model to sell homes for agents has said it can be done without charging buyers non-refundable fees.
Lets Bid was launched four years by former banker and property investor Milton Rodosthenous as a free-to-use MMoA hybrid auctions service. Agents are paid by the vendor when the property sales, unlike the most common form of MMoA, where agents are paid up-front by the auction house involved.
“The difference between the big corporate MMoA operates like Iamsold is that we don’t charge buyers a fee,” he says.
“I realise this is an area where opinion divide sharply, buy buyers fees just don’t make sense’,” says Rodosthenous (pictured).
“Our model means we still get the financial because buyers pay a reservation deposit, but that deposit comes off the purchase price, which solves the problem of non-refundable fees bringing the sale price down.”
Rodosthenous is referring to an issue that The Negotiator reported on last week.
Leading traditional auctioneer Richard Copus criticised the MMoA auction because it weakens a bidder’s ability and motivation to bid strongly for properties because they’re facing a £6,000 additional cost from the outset.
“This is particularly true in the mass market where people are bidding for properties around the £200,000 mark.
“By not charging a non-refundable fee, our agents’ ensure that their vendors get the best price possible.”
Rodosthenous also claims that, because agents are paid their fee up-front when they use the MMoA, it means they are de-motivated to work for the vendor.