Breaking Down the Modern Method of Auction for First Time Buyers

Buying a home for the first time can be both exciting and daunting, especially if you're considering the modern method of auction (MMOA). While auctions may feel intimidating, this innovative approach offers some unique benefits and opportunities, particularly for first-time buyers. The Auction Experts is committed to helping first time buyers understand the modern method of auction. We'll explain how it works, and share our tips to help you confidently navigate the process.

What Is the Modern Method of Auction?

The modern method of auction is a flexible and accessible way to buy property, combining the speed of a traditional auction with the convenience of online bidding. Unlike traditional auctions, where contracts are exchanged immediately, the modern method of auction allows buyers more time to complete their purchase. Typically, you’ll have 28 days to exchange contracts and another 28 days to complete the sale.

Properties listed through this method are often marketed online, and bids can be placed remotely, making the process transparent and convenient. With the support of experts like The Auction Experts, first-time buyers can explore this method with confidence.

Why First-Time Buyers Should Consider the Modern Method of Auction

Why buy at auction? If you’re a first-time buyer, you might wonder if the modern method of auction is suitable for you. Here are some reasons why it’s worth considering:

• Affordability: Properties sold through auctions are often competitively priced, offering opportunities to secure a bargain.
• Transparency: You can see bids as they come in, giving you clarity about the property’s true market value.
• Efficiency: The structured timeline helps you plan your purchase and avoid lengthy delays common in traditional sales.
• Flexibility: The extended completion period (compared to traditional auctions) allows time to arrange financing, making it more accessible for first-time buyers.

How Does the Modern Method of Auction Work?

Here’s a step-by-step guide to the modern method of auction:

• Find a Property: Look for properties marketed using this method. The Auction Experts showcase a wide range of properties suitable for first-time buyers.
• Register to Bid: You’ll need to sign up on the auction platform and may be required to pay a registration fee.
• Arrange Your Finances: Speak with The Mortgage Experts early to understand your budget and mortgage options. You’ll also need funds for the reservation fee, which is typically 2 to 5% of the purchase price.
• Place Your Bid: Once registered, you can place bids online. The auction will often have a set time frame, allowing you to monitor activity and adjust your bid accordingly.
• Winning the Auction: If your bid is successful, you’ll need to pay the reservation fee and begin the purchase process. Don’t worry – The Auction Experts can guide you through every step.
• Exchange and Completion: You’ll have 28 days to exchange contracts and a further 28 days to complete the transaction.

You can read more about how to sell at auction here.

6 Tips for First-Time Buyers Using the Modern Method of Auction

1. Do Your Research: Before bidding, research the property thoroughly. Look into its location, market value, and potential renovation costs.
2. Read the Legal Pack: Each property will have a legal pack available. This includes crucial information like title deeds, lease details, and any restrictions. It’s wise to consult a solicitor to review these documents.
3. Set a Budget: Decide on your maximum bid and stick to it. Don’t forget to factor in the reservation fee and any additional costs.
4. Secure Financing Early: Speak with The Mortgage Experts in advance to ensure you have a mortgage in principle. Our mortgage team are familiar with the modern method of auction and offer tailored advice.
5. Work with Professionals: Enlist the help of experienced professionals like The Auction Experts. We can answer your questions, guide you through the process, and help you feel more confident.
6. Inspect the Property: If possible, view the property in person before bidding to avoid any surprises.

Why Choose The Auction Experts?

Navigating the modern method of auction for the first time can feel overwhelming, but with The Auction Experts by your side, you’re never alone. Our team specialises in helping buyers like you understand the process, find the right property, and make informed decisions. If you’re ready to explore the modern method of auction, you can find an auction expert here, contact us today on 0330 179 8180 or email hello@theauctionexperts.co.uk.

In the meantime, we've answered some of your common questions about the modern method of auction if you're a first time buyer.

FAQs About the Modern Method of Auction

What happens if I win the auction but can’t get a mortgage?

Once you win, the reservation fee is non-refundable. It’s important to have your financing in place beforehand to avoid this situation.

Is the reservation fee included in the purchase price?

No, the reservation fee is separate and non-refundable. Be sure to factor this into your budget.

Can I pull out of the purchase after winning?

You can, but you’ll lose your reservation fee and may face additional charges depending on the terms of the auction.

Are properties sold through the modern method of auction always cheaper?

Not always, but many properties are priced competitively to attract buyers. It’s essential to do your research and know what you’re willing to pay.