Understanding the Modern Method of Auction

The Modern Method of Auction (also known as a conditional auction) is changing how people buy and sell homes in the UK. This auction method combines the best of both worlds: the speed and transparency of traditional auctions with the flexibility of private treaty sales.

It’s especially popular among home movers looking for a quick sale without the commitment of an immediate legal tie. In this article, we’ll break down how the Modern Method of Auction works, why it’s popular, and share some tips for selling your property at auction.

What is the Modern Method of Auction?

The Modern Method of Auction is a flexible auction format designed to suit both buyers and sellers. Unlike traditional auctions, where the hammer falling means a legally binding contract, this method gives buyers a set period, typically 56 days, to arrange financing and complete the legal requirements and sale. For sellers, it provides a secure sale without the risk of a fall through at the last minute, as the buyer pays a reservation fee to lock in their interest.

Why Choose the Modern Method of Auction?

This approach is quickly gaining popularity across the UK for several reasons:

• Faster Sales Process: The Modern Method of Auction means a swifter sale than the usual route, so is ideal for sellers who need a quick move.
• Reduced Fall-Through Rates: With a reservation fee required, buyers have a financial commitment, reducing the likelihood of them backing out.
• Greater Buyer Confidence: Buyers have the assurance of an exclusive period to secure finances, making it accessible for those needing mortgage approvals.
• Competitive Bidding Environment: Auctions often attract very motivated buyers who are ready to compete, driving up property prices.

For those considering selling through an auction, it’s a compelling alternative to traditional sales, especially in today’s dynamic property market.

If you are thinking of selling your property via auction contact The Auction Experts.

How the Modern Method of Auction Works

Here’s a breakdown of the process with The Auction Experts:

1. Reserve Price: Sellers agree on a guide price with us, plus a reserve price - the minimum amount they are willing to accept.
2. The Auction: During the auction, which is typically online for 21 days, prospective buyers bid, and when the auction ends, the highest bid that meets the reserve price is accepted.
3. Reservation Fee: The winning bidder pays a non-refundable reservation fee, which secures their exclusive right to buy the property.
4. The Reservation Period: After the auction, the buyer has a 56-day period to finalise finances and complete legal checks, giving them peace of mind and time to prepare for the final transaction.

This added flexibility can open doors to a wider pool of buyers who may not have the upfront cash available in a traditional auction.

Benefits for Sellers

Selling through the Modern Method of Auction offers some distinct advantages:

• Wider Market Appeal: With this conditional approach, more buyers are encouraged to participate, knowing they have time to secure a mortgage or seek additional advice.
• Quick, Secure Sales: For sellers in a hurry, this method can achieve a fast sale, within weeks, with less risk of buyer withdrawal.
• Transparent Process: The auction process is open and competitive, ensuring you receive fair market value for your property.

With The Auction Experts, sellers can expect a streamlined process and personalised support.

Tips for Selling at Auction

1. Stage Your Property for Auction Success: Prepare your home as you would for a traditional sale. Simple steps like decluttering and adding neutral décor can attract more interest, encouraging higher bids.
2. Understand the Reservation Fee: A key feature of the Modern Method of Auction is the reservation fee, which is around 10% of the sale price. Knowing this fee structure can help you calculate the total costs involved in the auction.
3. Check Your Auction Companies Reach: Choose an auction company, like The Auction Experts that has both local expertise and a broad network, as this will increase your property’s exposure and ensure you get the best possible outcome.

Is the Modern Method of Auction Right for You?

If you’re considering selling your property at auction, the Modern Method offers a mix of speed and security. By working with an experienced auction company like The Auction Experts you can feel confident knowing the sale is being handled professionally, with support at every step.

To find out more about how the Modern Method of Auction works, if you are thinking of selling your property via auction, are looking to register as a bidder for an upcoming auction, or simply need some advice, our friendly and professional team is here to help. Call us on 0330 179 8180 or email hello@theauctionexperts.co.uk

FAQs About the Modern Method of Auction

How does the Modern Method differ from traditional auctions?

The Modern Method gives buyers a 56-day period after the auction to secure their finances, unlike traditional auctions where the contract is binding immediately after the auction ends.

Is the Modern Method of Auction only for investors?

No, it’s suitable for a wide range of buyers, including first-time homebuyers, as it allows them time to arrange financing.

Can I sell any type of property through this method?

Yes! From residential homes to commercial properties, the Modern Method of Auction is versatile and can work for most types of property.

What happens if the buyer backs out?

If the buyer fails to proceed within the reservation period, the seller keeps the reservation fee, offering some compensation for the time lost.