In recent years, a new type of property auction has emerged in the UK, known as the modern method of auction. This innovative approach has revolutionized the way properties are sold, making the process quicker, more transparent and accessible to a wider range of buyers. We'll take a closer look at what modern method auctions are, how they work, and their benefits and drawbacks.
Modern method auctions are a hybrid of traditional property auctions and private treaty sales. Unlike traditional auctions, which involve a live bidding process in a physical location, modern method auctions take place online over a period of several weeks. They are also sometimes called "conditional auctions" because the sale is subject to certain conditions being met, such as a minimum price being reached.
Greater transparency - Modern method auctions provide transparency for both buyers and sellers. Buyers can see the current highest bid, and sellers can track the level of interest in their property.
Flexibility - Unlike traditional auctions, which require buyers to attend a live event and bid in person, modern method auctions can be accessed from anywhere with an internet connection.
Quicker sales - Because modern method auctions typically have a fixed end date, the process can be quicker than traditional private treaty sales.
Certainty - Once the reservation fee has been paid, the sale is legally binding, providing greater certainty for both parties.
Competitive pricing - Modern method auctions can drive up prices by encouraging buyers to make competitive offers.
Modern method auctions typically follow these steps:
The property is listed on the auctioneer's website, along with a detailed description, photographs, floor plans, and any other relevant information.
Potential buyers can register their interests and arrange viewings.
Buyers can make offers online at any time during the auction period, which typically lasts between 2-4 weeks.
If an offer is accepted, the buyer pays a reservation fee to secure the property and is given a period of time to exchange contracts and complete the sale (usually 28-56 days).
If the reserve price is not met, the seller may choose to negotiate with the highest bidder or relist the property for sale.