Under the modern method of auction, if a bid succeeds at the guide price, which of the following is true?

Under the modern method of auction, if a bid succeeds at the guide price, which of the following is true?

• A. exchange contracts and complete within 28 days of the auction.
• B. pay a non-refundable £13,000 deposit on the day of the auction.
• C. pay a non-refundable reservation fee of up to £6,500 on the day of the auction.
• D. pay compensation of £13,000 if he fails to exchange within 28 days of the auction.

Answer: (C)

In the modern method of auction, the key commitment on the day a bid meets the guide price is paying a non-refundable reservation fee to secure the property. This fee, which can be up to around £6,500, is paid on the day of the auction and is not returned if the buyer later backs out. It acts as a commitment to proceed, with formal contracts exchanged within a set period after the payment (often within 28 days), and completion follows thereafter. The other statements aren’t characteristic features of the process: there isn’t a fixed £13,000 non-refundable deposit paid on the day, nor is there a requirement to pay compensation if exchange doesn’t occur within 28 days. The reservation fee on the day is the defining step in the modern method of auction.

In the modern method of auction, the key commitment on the day a bid meets the guide price is paying a non-refundable reservation fee to secure the property. This fee, which can be up to around £6,500, is paid on the day of the auction and is not returned if the buyer later backs out. It acts as a commitment to proceed, with formal contracts exchanged within a set period after the payment (often within 28 days), and completion follows thereafter. The other statements aren’t characteristic features of the process: there isn’t a fixed £13,000 non-refundable deposit paid on the day, nor is there a requirement to pay compensation if exchange doesn’t occur within 28 days. The reservation fee on the day is the defining step in the modern method of auction.