Is Modern Auction Any Good? [Find Out If It’s Right for You]

In theory, modern auction offers home sellers a great balance between speed, price, and convenience. In practice, we think it’s a very different story.

If your estate agent has recommended modern auction, or you’re exploring alternative selling options, please read on…

So, is modern auction any good?

In theory, modern auction was created to give home sellers the best of both traditional auction & estate agent sales. It promises the speed and certainty of auction, with the high price of an estate agent sale. In practice, modern auction fails to deliver on many of its promises. It’s certainly not right for everyone.

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

In this article, we give our honest advice on the modern auction process, including the promises and realities of this selling method. We also set out actionable tips and compare alternative selling methods to help you find the best way to sell.

If you want to cut right to the chase and see if modern auction is right for you, we’ve created a free online quiz to help you do just that. If it is 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.

What is modern auction?

Modern Auction (aka The Modern Method of Auction) is an online “conditional” auction process. It has longer timescales and less rigid requirements compared with traditional auction. On average, Modern Auction is faster than an estate agent sale. It also has lower fall-through rates once a sale has been agreed.

Key points:

Online auctions last between 48 hours - 30 days on average.
Winning bidder pays a non-refundable reservation fee.
Buyer then has an “exclusivity period” (usually 56 days) in which to exchange & complete.
Buyer can pull out at any point up to exchange but would lose their reservation fee.

Is modern auction any good?

Now you understand the modern auction process a little better, let’s turn our attention to whether it’s actually any good for home sellers.

Modern auction promises a lot for sellers in terms of speed, certainty, convenience, and price. Plenty of estate agents recommend modern auction to sellers for these exact reasons (but this comes with its own set of problems).

But does modern auction actually deliver on these promises? Let’s take a look…

Top tip: Estate agents get a hefty referral fee for recommending modern auction, so they won’t always be looking out for your best interests.

Please take their recommendations with a pinch of salt and do your own research before committing to anything.

1. Modern auction is faster than an estate agent sale (in theory)

In theory, selling your house by modern auction is a lot faster than selling with an estate agent.

If your property sells first time around, you can expect to sell your home in around 12-16 weeks with modern auction. By comparison, the average estate agent sale takes around 25 weeks.

However, in practice, a lot of modern auction sales will end up taking longer than 12-16 weeks because they sell on the second or third attempt (or fail to sell altogether).

In fact, we’ve heard from auction insiders that some of the major modern auction houses are only selling around 30-40% of the houses they take on!

Top tip: Failed auction attempts can be costly. Not only do you lose time, but it can also affect the value of your property and its future saleability.

If you price your property realistically and find a good, local estate agent, you can sell just as quickly on the open market.

2. You’ll have access to more buyers (in theory)

In theory, modern auction is more accessible to a wider range of buyers compared to traditional auction (which is limited to cash buyers and investors).

Modern auctions have longer timescales, which give buyers time to arrange finances and secure a mortgage.

Although modern auctions are open to any kinds of buyers in theory, many are put off by the high fees or intimidated by the process.

A (not very glowing!) review of one of the biggest modern auction houses in the country.

As you can see, lots of buyers are unable, or unwilling, to buy at modern auction. Many are not prepared to gamble their mortgage deposit on non-refundable reservation fees.

You can read more buyer horror stories in the comments of this article.

If you’re thinking about selling by modern auction, keep in mind that you’ll likely miss out on potential buyers who would otherwise be interested in your property. This can reduce the final price you achieve and your chances of selling altogether.

3. Fixed timeframes make it convenient (in theory)

With modern auctions, there are set timeframes and real commitments up front in the form of non-refundable reservation fees.

This gives sellers the promise of a convenient sale, as you can plan around a pre-agreed completion date. If you’re a seller in a house chain, coordinating an onward purchase might seem like a real possibility.

Modern auction sales can, and often do, run over the 56 day deadline, as this unfortunate seller has found out. It seems the company also didn't explain the differences between traditional and modern auctions to the seller...

In reality, modern auction isn’t really an option if you have an onward purchase (unless you’re willing or able to “break the chain”).

There’s absolutely no guarantee the property will sell in the first auction. This makes it hard to sync up with your onward purchase.

Even if you do sell in the first auction, timeframes can and often do run over.

There is no penalty if a sale creeps over the 56-day completion deadline. Deadlines will often get extended by weeks, or even months in some cases.

This undermines one of the main benefits of modern auction and can be extremely difficult to navigate if you’re working to a strict deadline.

4. No fees (in theory)

Modern auction can seem appealing to sellers because many auction companies claim there are “no fees”. But nothing comes for free…

In practice, the buyer is usually responsible for the fees. Any fee the buyer must pay will ultimately come off the final amount they’re willing to bid for your home. This means you won’t be any better off overall.

Modern auction fees are hefty too.

A review from a disgruntled buyer who had to pay a hefty reservation fee on a £65k property.

Most modern auction houses we’ve come across charge a buyer’s fee of around 3-4% plus VAT (subject to a minimum of around £5,000 + VAT).

Hidden costs can also cause issues down the line if the buyer hasn’t noticed they’ll be responsible for your fees.

Did you know… If the buyer withdraws from your sale, the reservation fee doesn’t go to you, the seller. The auction house and estate agent share the fee themselves!

5. You'll get a good price (in theory)

Thanks to the longer timeframes, modern auction is accessible to all kinds of buyers. In theory, this means there will be more competition to drive up the final price.

However, the reality is quite different. So many buyers are put off modern auction because of the high fees and intimidating process.

Fewer bidders means a lower price overall, as there’s less competition to push the price higher. There’s also a big risk that your property will not reach the reserve price, and so will fail to sell at all.

The buyers that are willing or able to bid at modern auction are likely doing it because they want a bargain. That’s why houses at modern auction tend to fetch between 85-90% of their market value in our experience.

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.

6. A more certain sale (in theory)

In theory, you go to modern auction for a certain sale.

In practice, the “certainty” of modern auction only applies once the reservation fee has been paid.

You’ve got to find a buyer first…and this isn’t guaranteed.

As we mentioned above, auction insiders have told us that some of the major modern auction houses are only selling 30-40% of the properties they take on.

However, if you are lucky enough to find a buyer, modern auction does offer more certainty once you agree a sale.

Even if you do find a buyer, a modern auction sale is never guaranteed (as this seller found out).

Buyers make an expensive commitment to purchase your property in the form of a non-refundable reservation fee. This means only around 5% of modern auction sales fall through once this has been paid.

Should I sell my house by modern auction?

Modern auction is only right for a small percentage of home sellers, and we rarely recommend it to our readers.

Whether modern auction is right for you will depend on your individual priorities, property, and timeframes.

In our opinion, you can achieve better results pricing the property realistically with a good local agent. You’ll have access to many more buyers and can choose to set a competitive asking price to drum up lots of interest.

Plus, although you’ll have some fees to pay, you’ll end up better off overall as the buyer won’t have to adjust their offer to factor in any hefty modern auction fees.

If you don’t have the luxury of time and need to achieve a quicker than usual sale, there are things you can do to minimise delays and fall-throughs with estate agent sales (such as picking a low-risk buyer). You can read more about our 9 top tips on how to sell your house fast for the best price here.

If you want to find out if modern auction is right for you, you can take our free quiz.

If modern auction seems like 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 chat with a Home Selling Expert to help you figure out the best way to sell your home.

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By Matthew Cooper, Co-Founder of Home Selling Expert

I'm an experienced property insider, trusted media commentator, and the Founder of Home Selling Expert and YesHomebuyers.com. I've bought and sold almost 150 properties worth nearly £17m, and my advice articles (like this one!) have been viewed more than 1million times.

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