Is your property stuck on the market with no offers?
You might be missing a powerful selling option.
Traditional auctions scare many people away. But the modern method of auction have changed the game completely.
In this guide, I’ll reveal how modern auctions actually work. You’ll learn if this approach suits your situation.
No gavel-banging drama.
No instant completion pressure.
Just a smart way to sell difficult properties fast.
Want to know if it’s right for you?
Understanding the Modern Method of Auction
Modern method of auction (MMoA or “Conditional Auction”) give buyers 56 days to arrange their money instead of the usual 28. This attracts ordinary buyers, not just investors as it allows buyers time to arrange financing.
Most happen online instead of in auction rooms. The property is typically offered for a set period (i.e. 14-21 days) and the highest bid before the deadline wins.
This means buyers can bid from anywhere and have time to do their due dilligence.
The reservation fee is money the buyer pays upfront to secure the property. Your reserve price is the lowest amount you’ll accept.
These features help sellers:
- Buyer pays the reservation fee (2-5% of purchase price)
- Longer completion times attract more everyday buyers
- Online bidding creates competition
- Less chance of sales falling through
Estate agents often partner with auction houses to market properties before the auction.
Modern auctions work best for unusual properties or when you need a guaranteed completion date. This is because they typically sell for less than the current market value.
There’s typically less stress than selling a house at an auction house.
How the Modern Method of Auction Process Works
Here are the three main steps of the Modern Method of Auction.
Getting ready for auction takes careful planning.
Estate agents help set a guide price that attracts bidders. This price gives buyers an idea of what the property might sell for, but the actual selling price could be higher. The seller also sets a reserve price, which is the lowest amount they’ll accept.
Legal packs must be ready before bidding starts.
Bidding happens online instead of in a noisy auction room.
Anyone wanting to bid must register and prove who they are first. Most modern auctions run for about a month, not just one day like traditional auctions. Bidders can see all offers made on the property, which makes everything fair and open.
The highest bid at the end wins the property.
Winning bidders must pay a reservation fee right away.
This fee is usually about 2-5% of the purchase price and holds the property for you. You then have 28 days to exchange contracts with the seller, which makes the sale legally binding. The full purchase must usually complete within 56 days of winning the auction.
Your solicitor guides you through these final steps.
The government website offers more information on selling methods. Modern auctions give sellers more security than traditional sales while giving buyers more time to arrange their finances.
Remember that winning an auction is a serious commitment. You can’t change your mind without losing money, so be completely sure before you bid.
Benefits for Property Sellers Using Modern Auctions
Selling your home through auction has special advantages.
Security Advantages
Modern auctions protect sellers from common problems.
Buyers must pay fees they can’t get back when they win. This shows they’re serious about buying your house. Unlike normal sales, buyers can’t easily change their mind or lower their price at the last minute.
Price drops happen less in auctions. Sometimes buyers suddenly offer less money right before the completion (gazundering). Auction rules stop this trick that causes sellers a lot of stress.
Also, you can set a minimum price to protect yourself. This makes sure your property won’t sell for less than you’re willing to accept.
Speed Considerations
Auctions have strict deadlines that keep things moving quickly.
The whole process follows a set schedule with clear end dates. Most auction sales finish within 28 days, much faster than regular sales that can take many months. This quick timeline helps sellers who need to move soon or need their money quickly.
Buyers know they must act fast or they’ll miss out. This pushes the sale forward without the delays that happen in normal home selling.
Solution for Difficult Properties
Some houses are hard to sell the normal way.
Selling probate property (homes you inherit) is easier through auction. Houses needing repairs or with unusual features often find their perfect buyer at auction. Investors specifically look for these opportunities.
Auctions are also good for stopping repossession when banks try to take your home. The quick, certain timeline helps sellers in money trouble. When time is running out, auctions provide a solution that normal sales cannot match.
Advantages for Property Buyers at Modern Auctions
Buying at auction isn’t just for experts anymore.
Accessibility Improvements
Modern auctions are easier to join than old-style auctions.
Old auctions needed cash buyers who could pay right away. Today’s auctions give you time to get a mortgage after winning. This means regular people can buy at auctions now, not just rich investors.
You can use normal mortgages for auction homes. Government help to buy schemes for first-time buyers work at auctions too.
Bidding online feels less scary than being in a room with people shouting prices.
Property Opportunities
Auctions have unique homes you might not find elsewhere.
Special properties that need work often end up at auction. These might be perfect if you want something different or don’t mind fixing things up. Sometimes houses sell for less than they would in regular sales.
You can see exactly what other people are offering. This helps you know the true price, unlike secret bids where you’re just guessing.
Some auction properties have fewer people trying to buy them, giving you a better chance.
More Time
Modern auctions give you longer to complete everything.
You usually get 28-56 days to finalize your purchase. This gives you enough time to arrange your mortgage properly. Banks like this timeline because it fits their normal lending process.
You can get the property properly checked during this time. This helps avoid nasty surprises after buying. You’ll have time to plan your move without rushing.
Learn more about how traditional auctions work in this guide to selling a house at auction.
Costs and Fees in Modern Method Auctions
Buying or selling a house at auction involves different costs than regular house sales. Here’s what you need to know about who pays what.
Seller Costs
Sellers face several fees when putting a house in auction.
You’ll pay an entry fee between £300-£1,000 to get your house listed in the auction. If you want better advertising to attract more buyers, that’s another £200-£500.
You also need to prepare a legal pack with all the important documents about your property. This typically costs £350-£750 and needs to be done by a solicitor.
Buyer Expenses
The biggest surprise for buyers is the reservation fee.
This fee (usually thousands of pounds) is paid on top of the house price and goes to the auction company, not the seller. Many buyers don’t realize this extra cost when planning their budget.
The reservation fee also has 20% VAT added to it. So a £5,000 fee actually costs you £6,000 after tax.
Additional Costs
Smart buyers invest in checking the property before bidding.
A property survey costs £250-£1,500 depending on how detailed you want it. This helps you avoid buying a house with expensive hidden problems.
You’ll need a solicitor for the legal process of transferring ownership, which costs £800-£1,500.
If you’re getting a mortgage, the bank will charge arrangement fees and possibly valuation fees too.
Reservation Fee Amount Calculation
The reservation fee is calculated as a percentage of what you pay for the house.
Most auction companies charge between 2.5% and 4.5% of the purchase price. For a £200,000 house, that means £5,000-£9,000 in fees.
Many companies cap their fees at around £10,000-£12,000, which helps if you’re buying an expensive property.
Stamp Duty Land Tax
This is a government tax on property purchases.
Currently, you don’t pay stamp duty on houses under £250,000. For more expensive properties, the tax increases in steps.
First-time buyers get a better deal – you don’t pay any stamp duty on properties up to £425,000. This can save you thousands of pounds compared to people who already own property.
Use the Stamp Duty calculator to figure our how much you will pay.
Legal Considerations and Requirements
Paperwork protects everyone when selling houses. Get your important documents ready early to avoid problems.
Your legal pack shows you own the house. It includes title information and Land Registry documents. It also shows if there are any problems with the house.
Special insurance helps fix small paperwork issues.
The sale agreement is like a promise. It says what happens if someone changes their mind. Breaking the agreement ends up costing money, so it’s important to only make a bid if you’re sure you can buy it.
Before buying, people should:
- Check who owns the house
- Look for local problems
- Have someone check if the building is safe
- Get special help for unusual houses
Always get your own solicitor before buying or selling. They help keep everyone safe.
Good paperwork means fewer surprises later.
Potential Pitfalls and How to Avoid Them
When buying or selling at property auctions, knowing the common mistakes can save you time and money.
Let’s break down the key pitfalls for both buyers and sellers so you can bid with confidence.
Common Issues for Sellers
Many sellers aim too high with their reserve price. This scares away good buyers.
Setting the right price means looking at what similar homes sold for recently. Talk to experts who know about auction sales in your area. Remember that buyers come to auctions looking for deals, not to pay top prices.
The goal is to get people excited about bidding. A lower starting price often brings more bidders and better results.
First impressions matter a lot.
Dirty, cluttered, or broken-down homes turn away serious buyers. Even small fixes like fresh paint, clean carpets, and tidy gardens can make a big difference. Many sellers lose thousands by skipping these simple steps.
Buyers need to see themselves living in your home. Help them picture it at its best.
Missing paperwork causes big problems.
Buyers need all the facts before they bid. This means having all legal papers ready for them to check. When you skip this step, good buyers walk away or bid much lower.
Your legal pack should be complete and ready well before auction day. This builds trust with buyers who might spend big money on your home.
Risks for Buyers
Be careful with your money.
If you win a bid but can’t complete the house purchase within the timeframe, you could lose your reservation fee. This often happens when buyers don’t sort out their finances before bidding.
Always make sure you can get the full amount before you raise your hand. The excitement of winning quickly fades if you lose your deposit.
What you can’t see can hurt your wallet.
Many auction properties have problems that aren’t obvious at first glance. Roof issues, foundation cracks, and outdated wiring can cost thousands to fix.
Always get a survey done before you bid. The cost of an inspection is tiny compared to the surprise bills that come with hidden problems.
Banks can be fussy about auction homes.
Getting a mortgage for an auction property can be harder than for normal homes. Some banks won’t lend on homes that need lots of work.
Sort out your money before the auction. Talk to lenders who understand auction purchases and get an agreement in principle that covers the type of home you want to buy.
Comparing Modern Auctions to Alternative Selling Methods
Here are the main ways to sell your property so you can see the pros and cons of each approach.
| Sale Method | Timeframe | Price Range | Fees | Hands-on Level | Additional Notes |
| Cash House Buyers | 7-28 days | 75-85% | None + legal fees covered | Minimal | Quickest most certain sale route |
| Traditional Auctions | 3-4 months | 75-90% | 2-3% + entry fee + legal fees | Medium | Exchange on auction day, in a physical auction house |
| Modern Method of Auction | 3-5 months | 75-90% | 2-3% + entry fee + legal fees | Medium | Online bidding, more flexible completion |
| Online Estate Agents | 4-7 months | 85-100% | Fixed fee i.e. £500-£1000 + legal fees | Very High | Self-manage viewings & marketing |
| Traditional Estate Agents | 6-9 months | 90-100% | 1-3% + VAT + legal fees | High | Regular viewings, negotiations |
| Assisted Sale (with or without cash advance) | ~12 months | 100% + | Mortgage payments deducted + renovation costs | Low | Can have partial upfront payment, buyer handles all refurb costs |
You can find out more about cash house buyers here.
Why Choose Property Buyers Today
Most people avoid MMoA because they usually receive a lower price.
But there are other unexpected issues that come along with this method too.
If you are in a rush to sell your property here are some of the reasons why so many people choose to work with us…
Speed
Most house sales take months, but we can buy your property in as little as 7 days.
This quick process is perfect if you need to move soon or want to avoid being stuck in a long chain of buyers and sellers. We have the cash on hand so don’t need to wait for mortgages or a chain to collapse.
Guaranteed Sale
Did you know 1 in 3 sales fall through on the open market?
We know how frustrating it is to get 6 months into a process and have a buyer pull out.
When we give you the final price for your house, that’s the amount you’ll get. Guaranteed!
No Costs
You won’t face any costs with us.
We handle all the expenses involved in buying your property, including legal fees and surveys. You get cash in your bank when the sale is complete, and there are no surprise estate agent commissions to worry about.
No Stress Or Hassle
Our team supports you through the whole selling process.
We keep you updated about what’s happening and answer any questions quickly. You’ll always understand what’s going on with your sale and what happens next.
Free Property Valuation
Our property experts will value your house at no cost to you.
They look carefully at your property and check local market prices to give you an accurate figure. This professional service comes with no obligations.
No Viewings Required
Forget about cleaning and tidying for viewings.
We don’t need multiple visits or open houses to make our offer. This means no strangers walking through your home, and no disruption to your daily life.
All Properties Welcome
Whether your house needs work or is in perfect condition, we’ll buy it.
We have experience with all types of properties and conditions. This means you can sell your house to us no matter what state it’s in.
Professional Legal Service
Our expert team manages all the legal requirements for you.
We work with experienced property lawyers who make sure everything runs smoothly, and put your property at the top of their list. This gives you peace of mind that your sale is being handled properly from start to finish.
