Auctions are now more accessible than ever before, with the Modern Method of Auction (MMoA) opening it up to more buyers and offering an attractive 0% commission option for sellers. The traditional "Homes Under the Hammer" style of in-room auction is no longer the only option, with the auctions market shifting more toward online auctions, thereby offering everyone the ability to join from the comfort of their homes.
But it’s not just where an auction takes place that’s changed. The different terms under which you can sell a property are more accommodating to a wider range of buyers.
Traditional Auctions (unconditional) typically conclude missives when the auction ends and complete 28 days later, giving you little time to arrange finances, thus making them more suited to cash buyers. However, with the Modern Method of Auction, you have an extended 56-day* completion timeframe, giving buyers the choice to buy with a mortgage and introducing a whole new audience to auctions. In 2022, 40% of online auctions were sold via Modern Method of Auction, with a growing number of consumers taking part in auctions overall.
What about auction fees?
With the Modern Method of Auction, there is 0% commission** and no upfront costs for you as the seller.
What are the other benefits of the Modern Method of Auction?
There is added security on both sides. Property information is supplied upfront, so the buyer fully understands what they are bidding on. The buyer reservation fee and the signing of the reservation agreement gives you extra protection against gazundering, which is when a buyer lowers their original offer.
How auction works
Pricing Strategy – Your experienced Auction Specialist will work with you on a pricing strategy to encourage as much interest as possible. You are always in control. They will discuss an undisclosed reserve price, this is the minimum that a seller would be willing to accept, so the property will not sell for any less, and market it at a competitive starting price to generate interest.
Getting prepared – At this stage, your property details, home report and ID checks are completed, and an Auction Pack is prepared.
Pre-auction Marketing – While your Auction Specialise get the Auction Pack ready, your property will be marketed in the usual way to maximise exposure, interest, and viewings. The more people interested, the more likely there’ll be competitive bidding, which can drive up your property’s final selling price.
Ready to go – Now that your Auction Pack is complete, your Auction Specialist will discuss the best timeframe with you and set out your property's auction start and end date, then bidding can begin.
The auction will end once the timer runs out, and you have received an offer on or above the reserve price. However, to encourage the highest price possible, if a bidder places a bid in the last minute, the time will be extended by 2 minutes to ensure everyone has had a chance to bid.
Your property has sold – The buyer pays a Reservation Fee, so they are fully committed to the purchase, and they will complete in either 28 or 56 days* from receipt of the draft contract, depending on the method of auction used.
Next steps – You will be kept informed on progress every step of the way by an expert completions team, who will take you through to completion.
Who are auctions for?
Auctions are not just for rundown vacant properties. Deciding to sell at auction is more about the personal circumstances rather than the type of property. Due to the quicker timescales involved, if you are likely to be in a chain, i.e. you are moving on, it is unlikely that an auction will be right for you. You need to ensure you can complete the sale within the timescale detailed in the Auction Terms & Conditions, usually 28 or 56 days*.
However, if you are looking for a sale with no estate agency fees, more security, a transparent process, or you need to sell quickly without being reliant on a chain, selling at auction could be the right choice for you.