Account
Customer Login Agent & Seller Login

Fees and additional costs

Participating in an online auction offers a fast and transparent way to purchase property, but buyers must be fully aware of the fees and additional costs associated with the process. Unlike traditional property purchases, where expenses are spread out over time, auction transactions require upfront payments and strict financial commitments. Understanding these costs in advance ensures buyers can budget effectively and avoid unexpected financial obligations after winning a bid.

Auction Fees Explained

Every auction platform charges fees for participation, covering administrative costs and ensuring the smooth operation of the bidding process. The key fees associated with buying at auction include:

Fee Type Description
Buyer’s Premium A fee charged by the auction house, typically a percentage of the final purchase price. This amount varies depending on the auctioneer and must be paid on top of the winning bid.
Deposit Usually 10% of the final bid amount, payable immediately after winning the auction. This deposit secures the property and forms part of the total payment.
Reservation Fee In modern auctions, a non-refundable reservation fee is charged instead of a deposit. This fee secures the property but does not contribute to the final purchase price.
Administration Fee Some auctions charge a fixed admin fee to cover legal paperwork, property listing, and handling of the transaction. This fee may be nonrefundable even if the purchase is not completed.

Since auction fees can vary, buyers should carefully review the special conditions of sale in the Buyer Pack before placing a bid.

Legal & Conveyancing Costs

Auction purchases require buyers to appoint a solicitor or conveyancer to handle legal paperwork, conduct due diligence, and ensure smooth ownership transfer. Legal fees depend on the property type and complexity of the transaction. Buyers should budget for:

  • Solicitor’s fees typically range from £800 – £2,500, depending on the property and the extent of legal checks required.
  • Local authority searches, land registry checks, and environmental assessments cost between £250 – £500.
  • Stamp Duty Land Tax (SDLT) - Payable on properties exceeding the UK government threshold.
Stamp Duty Land Tax (SDLT) Rates (England & Northern Ireland)

The standard SDLT rates for England & Northern Ireland:

Property Price Bracket Stamp Duty Rate
Up to £250,000 0%
£250,001 – £925,000 5%
£925,001 – £1.5 million 10%
Over £1.5 million 12%

For first-time buyers, the 0% threshold extends to £425,000. Buyers should confirm SDLT obligations with their solicitor before bidding. 5% SDLT on the portion from £425,001 to £625,000. If the price is over £625,000, you cannot claim the relief and you have to follow the standard SDLT rates as listed above.

Additional Property Costs

Beyond auction fees and legal expenses, buyers must consider additional property-related costs that may arise after winning a bid.

  • Buyers requiring a mortgage must account for valuation fees, mortgage arrangement fees, and lender administration costs. You can refer to GPS Finance for further information.
  • Some buyers opt for a structural survey before completing the purchase to assess potential repairs or hidden defects.
  • Most auction purchases require immediate building insurance from the moment contracts are exchanged.
  • Many auction properties require refurbishment, and buyers should budget accordingly based on property condition.
  • Buyers become responsible for council tax and utility bills from the completion date.
Why Understanding Fees is Crucial

Auction purchases move quickly, leaving little room for financial adjustments after bidding. Buyers should always calculate the total cost of purchase, including auction fees, legal expenses, taxes, and potential renovation costs, before committing to a bid. Proper budgeting ensures a smooth transaction and prevents financial strain during the completion process.

Sold4u2day Star Sold4u2day Star Sold4u2day Star