Auctioneer fee payable if sold prior auction?

I just sold a property advertised as auction, however I accepted an offer 2 days prior the auction date, and the contract was exchanged on the following day. Auction NEVER happened.

When it comes to settlement, i was surprised that the agent charged me the full auctioneer fee. Here's his explanation.

Unfortunately, as we locked in the auctioneer for that time slot, all owners still need to pay the auctioneer fee. Its not so much about using their services as it is locking in that time/date for the potential auction. It was effective in our case as it forced the buyer to act and make her best offer prior to the auction.​

Is that normal??

I guess if i cancel the auction at the very last minute (ie. less than 24 hours), then I am more than happy to pay, but that's not my case. And I can see 90% of property listed by this agent were sold prior auction, it's not fair for owners to pay extra cost if it wasn't pursue that way.

 

You know we'll all ask "what does your contract with the REA say". I'm sure it's in there

 

The agreement said once the booking with auctioneer is confirmed, it's not refundable. My challenge would be does the agent need to acknowledge the vendor before booking? Potentially he could have booked in at the very beginning to lock in his profit.

 

a smart businessman would do that.

Auctioneers are booked weeks in advance, if you had an auction date and time set then your auctioneer would have been booked.

 

I would have considered 2 days prior to be pretty much 'last minute' in auctioneer booking terms.

 

And if you signed the agent authority where the intent was to sell at auction, booking the auctioneer would seem reasonable? You would be complaining if the agent waited until the last minute and there was no auctioneer available. And I doubt you could book an auctioneer in 2 days.

 

Yes, normal.

 

If I'm engaging an agent myself I know his/hers selling strategy well in advance before listing with them.

What was the sale price on the property, the commission amount and the auctioneers fee?

 

Sounds like it was sold under auction conditions also with the unconditional exchange. Seems normal to me.

 

Would you have preferred to let the property go through to auction then? All you had to do was say 'no' to the offer and proceed with the auction.

 

In hindsight, it makes sense why he recommended auction campaign instead of private treaty, whilst 80-90% stock in area were sold prior or after. It's tricky, lesson learnt.

 

Did your property sell prior to auction on auction terms? ie unconditional?

if it wasnt an auction campaign, the sell might not have been unconditional. Personally, that certainty is worth a couple hundred dollars.

 

• You'd agreed for an auction.
• Auctioneer (usually a contractor) has been booked
• Property is sold prior to auction
• You want to renege on the agreement to pay the auctioneer
• Chances of the auctioneer getting a 'stand-by' gig would be minimal.

Unfortunately it's very unlikely to get out of paying for the fee as the auctioneer would lose a sizeable part of the day for each appointment (they possibly only have 2 or 3 bookings for the day 1½-2 hours including travel).

There's no harm in asking for a discount but the fee isn't gonna break the bank as it was clearly advised & agreed.