Exchange and Completion Timelines in the Modern Method of Auction: What Sellers Need to Know

Selling a property through the modern method of auction (MMoA) offers a structured and transparent process, providing sellers with a secure and efficient way to achieve a sale. Unlike traditional auctions, where contracts are exchanged immediately, the modern method of auction allows for a more flexible 56-day timeline. This extended timeframe makes auctions accessible to mortgage buyers, increasing competition and potentially driving up sale prices.

However, to ensure a smooth and successful transaction, sellers must understand the key milestones of the auction timeline. Misunderstandings or delays can cause unnecessary stress and, in some cases, jeopardise the sale. At The Auction Experts, we guide sellers through each step of the auction process, helping you avoid pitfalls and ensuring you achieve the best possible outcome.

A successful auction sale depends on two key legal aspects: the legal pack and the reservation fee. The legal pack ensures buyers have access to all necessary information upfront, while the reservation fee secures the buyer’s commitment. Understanding how these elements fit into the auction timeline will help sellers manage expectations and prepare effectively for each stage of the process.

Understanding the Auction Timeline

One of the main advantages of selling through the modern method of auction is that it provides a structured timeline for buyers and sellers to follow. Here’s how the process unfolds:

Auction Day – Winning Bidder Pays the Reservation Fee

Once the auction ends and a winning bid is accepted, the buyer must immediately pay a reservation fee to secure the property. This fee is non-refundable, ensuring that only serious buyers participate in the auction.

What This Means for Sellers:

• The reservation fee provides financial security, as the buyer is now committed to proceeding with the purchase.
• The seller agrees not to accept any other offers during the 56-day completion period.
• The auction company handles the administrative work, confirming the buyer’s details and forwarding them to the seller’s solicitor.

Days 1-28 – Buyer Conducts Surveys, Secures Mortgage, and Prepares for Exchange

The first four weeks after the auction are crucial. During this period, the buyer must complete their due diligence, including:

• Arranging a mortgage (if required): Unlike traditional auctions, where buyers need cash or pre-arranged finance, the modern method allows time for mortgage applications.
• Conducting surveys: Most mortgage lenders require a survey to assess the property's value and condition.
• Finalising legal checks: The buyer’s solicitor reviews the legal pack, ensuring there are no outstanding issues such as boundary disputes, restrictive covenants, or planning permissions that could impact the purchase.

The legal pack is a critical part of the process. It contains essential documents, including title deeds, local authority searches, an Energy Performance Certificate (EPC), and the property information form. If any of these documents are missing or incomplete, it could cause delays in the buyer’s due diligence process. Sellers should work closely with their solicitor to ensure the legal pack is ready before the auction begins.

Tips for Sellers:

• Be responsive to solicitor queries – Delays often occur due to missing documents or unanswered legal questions. Sellers should ensure their solicitor has all the necessary paperwork ready.
• Encourage a prompt survey – If the buyer is slow to arrange a survey, this can cause unnecessary delays. The seller’s solicitor or auction company can follow up with the buyer to keep the process moving.
• Prepare for potential renegotiations – If the survey reveals unexpected issues (such as structural defects), the buyer may attempt to renegotiate the price. Sellers should discuss potential strategies with their auction expert in advance.

Day 28 – Exchange of Contracts and Payment of Deposit

By day 28, the buyer must exchange contracts, formally committing to the purchase. This is a legally binding step in the process.

What Happens at Exchange:

• The buyer pays a deposit, typically 10% of the purchase price.
• Both solicitors confirm that all legal conditions have been met.
• The completion date is set, usually within 28 days.

Why This Step Matters:
Once contracts are exchanged, the buyer is legally bound to complete the transaction. If they fail to do so, they risk losing their deposit as well as the reservation fee.

Tips for Sellers:

• Ensure all legal documents are in order: Any missing paperwork can delay the exchange. Working with an experienced solicitor ensures a seamless process.
• Confirm deposit payment: The deposit is typically held by the buyer’s solicitor until completion. Sellers should verify that the funds have been properly transferred.
• Discuss contingency plans: While rare, last-minute issues can arise, such as financing problems or legal disputes. Sellers should remain in close contact with their solicitor to address any challenges swiftly.

Day 56 – Completion Deadline and Final Payment

The final stage of the process is completion, which takes place 56 days after the auction ends.

What Happens on Completion Day:

• The buyer pays the remaining balance of the purchase price.
• The seller’s solicitor transfers ownership of the property.
• The buyer officially takes possession of the property.

If the buyer fails to complete by day 56, they risk serious consequences, including forfeiting their deposit and facing potential legal action.

Tips for Sellers:

• Ensure the property is vacant (if required). If the property is tenanted, sellers must arrange for the necessary notices to be served well in advance.
• Check outstanding mortgage balances. If the seller has an existing mortgage, they should liaise with their lender to ensure the remaining balance is cleared upon completion.
• Have a backup plan. In rare cases, completion may be delayed due to banking issues or last-minute solicitor queries. Being prepared for a short delay can help reduce stress.

Why the Modern Method of Auction Works for Sellers

One of the biggest advantages of the modern method of auction is that it reduces uncertainty for sellers. Unlike private treaty sales, which can take months and often fall through, the structured timeline ensures that:

• The buyer is financially committed from the start, reducing the risk of withdrawal.
• There is a clear process to follow, preventing unnecessary delays.
• The auction company and solicitors work together to keep the sale on track.

By understanding each stage of the timeline and taking proactive steps to manage the process, sellers can maximise their chances of a smooth and successful sale.

At The Auction Experts, we provide professional guidance and support to help sellers navigate the auction process with confidence. Our team ensures that every step, from listing to completion, is handled efficiently, allowing sellers to achieve the best possible price for their property.

Contact us today on 0330 179 8180 to discuss selling your property at auction.
Email hello@theauctionexperts.co.uk to get started.

In the meantime, we’ve answered some of your common questions about the auction timeline.

Frequently Asked Questions

What happens if the buyer fails to exchange contracts by day 28?

If the buyer does not exchange contracts by day 28, the seller’s solicitor can issue a notice requiring them to complete. If the buyer still fails to exchange, they risk losing their reservation fee.

Can the completion date be extended beyond 56 days?

Extensions are rare but may be negotiated between the buyer and seller under specific circumstances. However, sellers are not obligated to agree to an extension.

What happens if the buyer cannot secure a mortgage within 28 days?

If the buyer cannot arrange financing, they risk losing their reservation fee and deposit. This is why buyers should be financially prepared before bidding.

Does the seller receive the reservation fee?

No, the reservation fee is retained by the auction company as part of their service fee. However, this fee ensures serious buyers participate in the auction.

What role does the solicitor play in the exchange and completion process?

The seller’s solicitor prepares the legal pack, manages the contract exchange, and ensures the sale completes smoothly. Choosing an experienced solicitor can significantly reduce delays.