Modern Auction: How Much Would My House Really Sell For?

Modern Auction is meant to offer home sellers a faster, more convenient alternative to the traditional estate agent sale. But speed, certainty, and convenience come at a cost…

So, how much do houses sell for at modern auction?

On average, houses tend to sell for around 85-90% of their market value at modern auction. This is significantly less than you’d get selling with an estate agent. Houses tend to sell for less because there are fewer buyers, those buyers are looking for a good deal and they have to factor high fees into their final offer.

In this article, we give you a handy step-by-step guide so you can find out exactly how much your house might fetch at modern auction.

We also look in detail at why houses sell for less at modern auction (even if companies claim otherwise). Plus, we explore modern auction alternatives that might be better suited to your priorities, property, and timeframes.

If you want to cut right to the chase and see if modern auction is right for you, we’ve created a free quiz to help you do just that. If it’s a good fit, we’ll help you get in touch with the #1 Leading Auction House in your area.

Click the button below to get started.

1. How much do houses sell for at modern auction?

In our experience, you can expect to achieve between 85-90% of the market value of your home on average at modern auction. If you want, or need, to achieve full market value for your home, the only way to sell your house would be with a good, local estate agent.

1.1 Compromise between speed vs price

There will almost always be a compromise between price achieved and the time it takes to sell your home.

The fastest way to sell your home (to a house-buying company) is also generally the most expensive.

On the other hand, if you want the highest price, you have to be willing to wait. According to Rightmove, it’s taking over 7 months on average to sell your home with an estate agent!

Modern Auction falls somewhere between the two.

Let’s take a closer look at some of the reasons why houses sell for so much less at modern auction…

2. Why do houses sell for less at modern auction?

We’ve been in the property industry for over 15 years and have been keeping a close eye on modern auction during that time.

In our experience, houses sell for less at modern auction for three main reasons:

1. Fewer buyers. Modern auction sales come with added pressure for buyers to meet tight deadlines, pay big reservation fees and deal with an unfamiliar, intimidating auction process. This means lots of people either can’t buy at modern auction or simply don’t want to.
   
   In our experience, you cut out around 80-90% of your prospective buyers if you choose to sell by modern auction. When you cut out that many buyers, there’s far less competition to push the price up.
2. Buyers want a bargain. The buyers who are willing to go to the hassle of buying through modern auction are doing so because they want a bargain.
3. High fees. Modern auction is often sold to sellers as a “free service”. However, don’t be misled into thinking it’s free for you. Yes, the buyer is usually responsible for the high fees. BUT any fee the buyer must pay will ultimately come off the final amount they’re willing to pay for your home, so you’ll be no better off overall!

In short, you can expect modern auction to “cost” you 10-15% of your property’s full market value once you factor in fees and the final selling price.

Related: Read more about modern auction costs in our article: “Why Are Modern Auction Fees So High? [Seller’s Fee Guide]”.

3. How can I find out how much I’ll get at modern auction?

We’ve made it easy for you to find out how much you’ll potentially get if you sell your house at modern auction.

Simply follow these three steps:

Reserve price: The “reserve price” is the minimum amount the property can sell for at auction.

3.1 Watch out for inflated modern auction valuations

If you’d rather shop around yourself, just beware we’ve noticed an increase in the number of modern auction houses inflating valuations to win business.

Many modern auction houses use the valuation process as a sales pitch and will tell you what you want to hear to win your business.

Keep in mind the reserve price is not fixed when you sign up with a modern auction company. If you do sign up on the promise of the high reserve price, they’ll know from the outset that they’ll be calling you in three weeks to get you to reduce the price.

Unfortunately, this is getting more and more common. Here’s a review from one of the biggest modern auction companies in the country:

We’d recommend getting any auction house to justify their valuation with recent sales data. And remember, you’re almost never going to sell for the full market value at modern auction. So, if their valuation sounds too good to be true, it probably is…

You want to go with an auction house that gives you a realistic price. The best auction houses won’t take you on as a client unless you’re willing and able to accept and set a realistic reserve price.

Top tip: We have spoken to readers who have failed to sell their home at £250,000 after months with an estate agent. They’ve then been told by an auction house that they’ll be able to get £240,000 if they sell by modern auction!

If you’re struggling to sell at a certain price on the open market, there’s no way you’ll be able to achieve close to that price selling by modern auction with fewer buyers and higher fees.

Risks of setting a high reserve price

The format of modern auction encourages multiple buyers to bid against each other, with the hope that this will quickly drive up the final selling price.

But an overpriced property will not generate the type of interest needed to start a bidding war. You may even struggle to reach the minimum reserve price and sell altogether.

You’ll then either be forced to reduce the reserve price, or to withdraw from the auction altogether, reduce the reserve price and try again.

Warning! A failed modern auction attempt can devalue your property.

Local buyers may have seen the house advertised at a low auction price, see that it didn’t sell and therefore believe it’s worth even less.

You may end up getting a lower price when you try to sell it second time around.

4. Modern auction alternatives…

Here’s how modern auction compares to other selling methods in terms of the average price achieved:

• Selling with an estate agent. If you want, or need, to sell your home for its full market value, your only option will be to sell with a good, local estate agent.
• Selling by traditional auction. On average, properties in traditional auction tend to sell for around 80-90% of their market value. However, problem properties tend to do very well and might fetch more at traditional auction than they would on the open market.
• Selling to a house buying company. Genuine, well-funded house buying companies usually offer in the region of 78-83% of your property’s market value.

If you want to find out which selling method is best suited to your unique priorities, property, and timeframes, you can take our free online quiz.

If modern auction isn’t a good fit for you, you’ll have a chance to book a free, impartial chat with a Home Selling Expert to help you figure out your optimal selling method.

Click below to get started…

5. Other Pros & Cons of Modern Auction to consider…

If you’re considering selling your house by modern auction, there are other pros and cons you should consider in addition to price…

Pros of Modern Auction

Faster than the average estate agent sale (if it sells first time round)

Wider range of buyers compared with traditional auction

More properties fit the criteria for Modern Auction

Reduced fall-through rates compared with an estate agent (if you agree a sale)

Competitive bidding can drive up the price achieved

Cons of Modern Auction

Compromise on price

High fees and hidden costs

Sale not as “final” as traditional auctions

Smaller buyer pool vs estate agent sale

No guarantee it will sell

Difficult to coordinate in a chain

Inflated valuations are becoming common

Sales don’t always run to deadlines

Untrustworthy modern auction houses

Ulterior motives when it comes to recommendations

If you want to read more about the pros and cons of modern auction, you can check out our article: “Modern Auction: The Top 15 Pros & Cons [A 2024 Seller’s Guide]”.

5.1 Is modern auction right for you?

In our experience, modern auction is only right for a very small number of home sellers.

If you want to find out if modern auction fits your individual priorities, property, and timeframes, you can take our free quiz.

If modern auction is a good fit, we’ll recommend our #1 leading auction house in your area. If not, you’ll have the chance to book a free consultation with a Home Selling Expert to help you figure out the best way to sell your home.

Click below to get started…