Modern Method of Auction

Modern Method of Auction (MMoA)

Modern method auctions are a great way to combine the prices achieved through estate agents with the security of selling property at auction. Please leave your details below:

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What is Modern Method of Auction?

Also known as a ‘conditional’ auction, selling a house via Modern Method of Auction lengthens the amount of time between the close of the auction (exchange of contracts) and completion of the sale.

In most cases, as with traditional auctions, much of the conveyancing process is undertaken before the modern auction bidding starts.

Usually undertaken online, once the virtual hammer has fallen, the winning bidder pays a non-refundable reservation or holding fee.  This charge tends to vary between different modern auction service providers.

This provides the buyer with a period of exclusivity, typically 4 weeks (28 days).

Within this time, the modern auction buyer must exchange contracts, on which date a 10% deposit needs to be paid (unless otherwise agreed).

Then, the buyer has a further 28 days to complete on the sale (where the full purchase price is paid).

As with traditional auctions, if completion doesn’t happen after the exchange of contracts, the buyer could lose both the non-refundable and 10% deposit paid.  The auction house may also impose financial alongside abortive legal costs.

These processes combined, in most cases, mean that modern method of auction sales are much more secure.

How Does Modern Method of Auction Work?

Modern Method of Auction (or MMoA) is not reinventing the wheel in terms of buying and selling properties.

What it does bring is the ability to ‘lock-in’ buyers.  If they were to pull out of the sale after the hammer falls, they will lose the reservation fee.

As a result, home sellers increasingly use this type of service as it’s a great way to overcome the many archaic processes of a ‘normal’ house sale, without compromising on getting a good price.

Many modern method auctioneers partner with estate agents across the country or are agents themselves that have bolted-on MMoA as part of their service.

However, as highlighted below, there are a couple of key differences with an estate agency sale.

As with traditional auctions, much of the legal ‘leg work’ happens before the auction.

This is because buyers commit themselves to the sale when the virtual hammer falls.  It makes sense for them to want to know the ins and outs before bidding.

There are also financial obligations to be made once the hammer falls which do not exist with conventional estate agency home sales.

Although it may seem like a lot of hassle, it all serves to make the whole process much more secure.

Sellers can also relax once the bidding is done, safe in the knowledge that there’s very little chance of things falling apart.

Check out the various pros and cons of using a modern auction service.

How Does Modern Method of Auction Work?How Does Modern Method of Auction Work?

For Sale by Modern Method of Auction

Property Solvers Modern Auction Services

Here at Property Solvers, we offer modern (and traditional) property auctions.  This is in addition to the We Buy Any House and estate agency services we offer.

You may be interested in reading about how we work and our frequently asked auction questions.

Please also feel free to call us anytime.  Our freephone number 0800 044 3922 is open 24 hours, 7 days a week.  You can also leave your details via our get in touch form or email us at [email protected].

Property Solvers Modern Method of Auction Services

Common Questions About Modern Auctions

With 1 in 3 estate agency sales falling through, using the Modern Method of Auction enables you to get the security that comes with selling through a traditional auction house.

What’s more, you will not need to compromise on getting a good price for your property.

Fees vary between auction houses, but you can generally pay as high as 3% of the sale price to nothing at all.  With the latter option, it’s the buyer that takes on the fee.

From a procedural standpoint, bar the timeframes, there is not too much of a difference.

A lot of the legal work is undertaken before the auction begins.  Then, the winning bidder / buyer must exchange contracts within 28 days and then complete the sale within the following 28 days.

Once the online hammer falls, buyers must instantly pay the auctioneer a non-refundable deposit.   If they do not meet the set deadlines, they risk losing this money.

We typically use HM Land Registry sold house price data and Royal Institute of Chartered Surveyors red book standards.

Our auction valuation team will also take a close look at the condition (preferably via a viewing) and undertake size comparables – utilising Energy Performance Certificate (EPC) data.

We encourage sellers to download one of our FREE auction valuation reports.

Yes, absolutely – we regularly work with commercial and property portfolio sellers.

In fact, it often works better as – with the extended timeframes – commercial buyers are more likely to make higher offers (relative to traditional auctions).

One of the main reasons of extended the auction timeframe is that buyers are in a better position to organise mortgages or other forms of secured finance.

Most will either use their existing mortgage lender or approach a broker who will seek the most appropriate option.

Enabling buyers to access auction finance often means that the prices achieved at modern auctions are higher compared to the traditional way of selling.

Our fully-regulated Sell House Fast service generally purchases property directly for between 80 and 75% of the market value.  There are no estate agency fees and we cover all legal costs.  We can also offer cash advances in as little as 48 hours.

Whether you choose this service will depend on how quickly you need to dispose of your property.

As a one-stop shop for quick house sales, we would always advise on the best course of action based on your desires and circumstances.