The Modern-Day Auction Method of Selling Properties in the UK - So what is it all about?

The property market in the UK is evolving, and one of the increasingly popular ways to sell homes is through the Modern Method of Auction (MMoA). Unlike traditional auctions, which take place in physical auction houses with cash buyers, this method uses online bidding platforms, allowing a broader range of buyers—including those needing mortgages—to participate.

But is this method right for you? Below, we’ll explore how it works, along with the pros and cons for both buyers and sellers as I see it.

How Does the Modern Auction Method Work?

1. The property is listed on an online auction platform with a starting bid. If being sold through an estate agent, they will typically work along side an online auction house, market the property through the usual portals such as Rightmove, Zoopla etc, prepare all of the floor plans, marketing pictures and conduct viewings. Just as they would with a property being sold through private treaty.

2. Buyers view the property, ask questions, have access to the buyers pack and place bids over a fixed time period, usually 30 days should they wish. 

3. When the auction ends, the winning bidder pays a reservation fee (typically 2-5% of the purchase price).

4. The buyer has 28 to 56 days to complete the purchase, allowing time for mortgage applications.

This method blends the competitive bidding of traditional auctions with a longer completion window, making it more accessible than standard property auctions.

Pros and Cons for Sellers

Pros for Sellers

✅ Faster Sales Process – Unlike private treaty sales, which can take months, modern auctions have fixed timelines, ensuring a quicker transaction.

✅ Reduced Risk of Fall-Throughs – Buyers pay a non-refundable reservation fee, making them less likely to pull out compared to private sales. 30% of private treaty sales fall through compared to only 5% via MMoA.

✅ Competitive Bidding Can Increase Sale Price – If multiple buyers compete, the final price could exceed expectations.

✅ No Estate Agent Fees – In most cases, the buyer pays the fees, meaning sellers often avoid estate agent commissions.

✅ Attracts Serious Buyers – The upfront reservation fee discourages time-wasters and ensures bidders are financially prepared.

Cons for Sellers

❌ No Guarantee of a High Selling Price – If there’s low interest, the property may sell at the reserve price (the minimum acceptable bid) or not at all.

❌ Limited Control Over the Buyer – Unlike private sales, where you can negotiate with buyers, auction sales go to the highest bidder, as long as the reserve is met.

❌ Not Suitable for All Properties – This method works best for properties attractive to investors or quick-sale buyers, but unique or high-end homes may struggle to generate competitive bidding.

Pros and Cons for Buyers

Pros for Buyers

✅ Fair and Transparent Bidding – Unlike private treaty sales, where buyers risk being gazumped, auctions provide real-time bid updates.

✅ Potential to Get a Bargain – Some properties may sell below market value, offering a good investment opportunity.

✅ Longer Completion Time Than Traditional Auctions – Unlike traditional auctions, where completion is required within 28 days, MMoA allows up to 56 days, making it easier to secure mortgage financing.

✅ Reduced Risk of Seller Backing Out – Once a bid is accepted, the seller is committed to proceeding, reducing the chance of sales falling through.

Cons for Buyers

❌ High Reservation Fees – Buyers must pay a non-refundable fee (typically 2-5% of the property price), which does not count toward the purchase price.

❌ Increased Overall Cost – On top of the purchase price, buyers may face paying higher than the market value of the property if they have not done their homework.

❌ No Room for Negotiation – Unlike private sales, where buyers can negotiate price and terms, auction buyers must accept the sale as is.

❌ Risk of Overpaying in Competitive Bidding – Excitement can push bidders to pay more than they initially intended.

Is the Modern Auction Method Right for You?

The Modern Method of Auction is a great choice for sellers who want a faster sale with reduced risk of fall-throughs, and for buyers looking for transparency and potential bargains. However, the high reservation fees for buyers and the uncertainty of the final sale price for sellers mean it’s not the perfect fit for everyone, as you will need your buyers fee upfront. 

Personally, I would not shy away from buying through MMoA:

• As  I feel that I could take advantage right now of there being less competition, as buyers have not quite got used to this method and many are listening to lots of negative narrative on social media. 
• I would always do my homework on what I believe the market value of the property is. 
• I would always work backwards from the market value of the property eg £220K, less the buyers fee eg £6600.00 and would therefore not want to pay more than £213K final bid. I would therefore be confident that I am not paying over the odds and would be even more happy if I secured the property for less than the £213K. This would mean that I had secured the property for below market value.
• It is worth noting that you may have very little competition, as not every interested party will be in a position to proceed and complete within the 56 days required. They may be in a chain, or not have the ability to secure a mortgage.
• There are mortgage lenders who are used to MMoA and can assist you within 25 days.
• There are also solicitors who understand the MMoA process and can complete within the 56 days as required.
• You still have access to the buyers pack and can send a surveyor to assess the property. 
• Consider the fact that these properties may be the exact properties that you would have put an offer on if they were being sold by private treaty. The only difference is, only those not in a chain will be competing with you in this instance. You may also be the only one bidding and therefore grab yourself a bargain. 

If you’re considering selling or buying via modern auction, weigh these pros and cons carefully—or seek professional advice to ensure it’s the right approach for you. I am more than happy to chat with you in the first instance should you feel that would be useful.

Would you consider buying or selling a property this way? Let us know your thoughts!

Diane Bialek

Diane’s Nottinghamshire Property Blog