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Modern method of auction

Journalist: Rachel Wait, Freelance

ended 22. January 2025

Modern method of auction: What is it and how does it work?  

Looking for expert comment on any of the following:

  • What is the modern method of auction?
  • How does it work?
  • Traditional vs modern auction
  • Pros and cons
  • Should I sell my house through the modern method of auction?
  • Can a seller pull out of a modern auction?
  • Can you get a mortgage for the modern method of auction?
  • What happens if a house doesn’t sell at a modern auction?

3 responses from the Newspage community

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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
The modern method of auction is a perfect blend of traditional auction principles and the convenience of online platforms. It offers a more accessible route for both buyers and sellers.
Unlike traditional auctions, this method allows for conditional sales. The winning bidder pays a reservation fee and has a set timeframe to arrange finances and complete the purchase. It provides flexibility for buyers and greater market exposure for sellers. However, it's not without its complexities. Sellers should understand that while they can withdraw before contracts are signed, reservation fees are non-refundable. Buyers need to ensure mortgage arrangements align with the auction terms. If the property doesn't sell, it often re-enters the market or returns to private treaty sales. For many, it's a modern approach to a traditional challenge, but professional advice is essential to navigate the nuances effectively.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The modern method of auction combines traditional auction principles with the convenience of online platforms, offering a more accessible route for buyers and sellers alike. Unlike traditional auctions, this method allows for conditional sales, where the winning bidder pays a reservation fee and has a set timeframe to arrange finances and complete the purchase.

It provides flexibility for buyers and greater market exposure for sellers, but it’s not without its complexities. Sellers should understand that while they can withdraw before contracts are signed, reservation fees are non-refundable, and buyers need to ensure mortgage arrangements align with auction terms.

If the property doesn’t sell, it often re-enters the market or returns to private treaty sales. For many, it’s a modern approach to a traditional challenge, but professional advice is essential to navigate the nuances effectively.

Happy to provide further insight if needed.
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Connor Harris
Co-Founder at Marco Harris
The modern method of auction is like mixing an auction's buzz with the flexibility of a private sale. Properties are listed on online platforms, and buyers have around 30 days to place bids. Unlike traditional auctions, where contracts are exchanged immediately with a hefty deposit, this method gives buyers 56 days to complete, making it friendlier for those needing mortgages. It's fast, transparent, and often drives competitive offers, but buyers face higher fees, and sales can still fall through. Sellers have the option to pull out before the auction closes, though fees might apply. It’s a great route if speed and certainty are your priorities, but it’s not always the best option for squeezing out every last penny. If the property doesn’t sell, it can go back on the market or take a fresh approach. For buyers, it’s crucial to have a mortgage lined up, as approvals can hinge on the property’s condition.