What is the Modern Method of Auction?

If you are a seller considering disposing of your property at an auction, you may want to consider selling your property under the new ‘Modern Method of Auction’ method. This type of auction offers a distinct approach compared to traditional auctions where the hammer falls on the highest bidder. Also known as a conditional auction, the Modern Method of Auction differs in procedures and timelines from a traditional auction.

How does it work?

The auction can take place online, with properties still marketed in the traditional way. Potential buyers can place bids at any time, up until the specified closing date and time.

What are the benefits to sellers?

One major advantage for sellers is that the buyer covers the agency fees, allowing the seller to retain the full sale price of the property.

What are the buyer considerations?

Buyers do need to be cautious with online bidding auction websites. On these sites, once the timer hits zero and the reserve price is met, the exchange occurs online, at that point. In a conditional auction, this is when you enter an exclusive reservation period.

Overview of the modern conditional auction process

Upon the seller agreeing on a price in a conditional auction, the buyer pays a non-refundable reservation deposit to the selling agents, effectively reserving the property. This reservation fee contributes towards the selling agent's fees. If for any reason, the seller decides to withdraw from the transaction, the reservation fee is then refunded to the buyer in full. If the buyer cannot or will not proceed to exchange and completion, then the non-refundable deposit is retained by the seller.

Accessibility and control

These auctions appeal to non-cash buyers. They are more accessible, yet they still offer sellers control by allowing them to set a reserve price. This ensures the property does not sell for less than the desired amount.

Financial arrangements

The non-refundable deposit varies but is usually a percentage of the final sale price. At contract exchange, a 10% deposit is required with the balance due upon completion, along with any additional fees.

Special conditions

Special conditions are prepared on behalf of the seller, detailing extra costs such as agent's fees and legal expenses.

What is the timeframe for a modern conditional auction?

After the buyer's offer acceptance and reservation fee payment, there are 28 days to exchange contracts, followed by another 28 days to complete, totalling 56 days. This extended period allows for traditional conveyancing processes, addressing inquiries, and, arranging financing. If the buyer is prepared earlier, the exchange and completion can be expedited.

Choosing the right auction provider

Sellers are not restricted to local agents; numerous online platforms and auction houses are available. It is crucial to choose one with a reputable track record and positive reviews.

Choosing the right marketing strategies to attract bidders

Understanding all fees and costs is essential before valuing your property and setting a reserve price. Auction houses utilise various marketing strategies, including online listings, offline advertisements (like newspapers or leaflets), and social media to attract bidders.

Next steps…

Working with some of the leading national auction houses in the UK, Amanda Payne, Director and Head of Conveyancing at Fishers Solicitors has expert knowledge of the auction sale process and is familiar with the potential pitfalls to avoid at a property auction. Fishers Solicitors have been awarded The Law Society’s Conveyancing Scheme accreditation which demonstrates our knowledge and expertise in all matters of residential conveyancing.

Contact information

For a no-obligation quote in respect of your sale property auction by modern method, regardless of where you are in England or Wales, please contact Amanda Payne at Fishers Solicitors for a more detailed discussion. Once we understand your circumstances, we can provide you with a clear overview of the costs and timeframe involved.