Modern Method of Auction – does reservation fee count towards mortgage valueMake Text Bigger
We are considering a property for sale by modern method of auction, specifically by Great Northern Property Auctions.
The vendor has chosen the model whereby he pays nothing and the auction fees are collected via a 3.5% or £5,000 (whichever is greater) + VAT reservation fee which is non returnable and does not form any form of deposit.
In the case of the property we are interested in, the starting price and sale projected purchase price is such that the reservation fee at £6,000 (inc. VAT) would be in the region of 15-20% – this is the North East, property prices are low.
For the purposes of a mortgage would the reservation fee be taken into account as part of the cost/value of the house?
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