Top 5 Reasons Why People Sell Their Houses by Modern Auction

Modern auction can be a good option if you’re looking for a faster than average sale, but it’s only right for a small number of home sellers.

Whether you’re researching alternative selling methods or are here following your agent’s modern auction recommendation, you’re in the right place.

So, why do people sell their houses by modern auction?

The top 5 reasons why people sell houses by modern auction are:

1. Speed (sell in 12-16 weeks)
2. Certainty (less than 5% of sales fall through once agreed)
3. Convenience (fixed timeframes)
4. Price (get more than selling to a house buying company)
5. Following bad advice (agents get paid to recommend it)

In this article, we’ll cover the five main reasons people sell their houses by modern auction. We’ve also included actionable tips and insider stats to help you figure out if modern auction could be the right selling method for you.

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 modern auction is a good fit, we’ll help you get in touch with the #1 Leading Auction House in your area for free.

Click the button below to get started.

What is modern auction?

Modern Auction is an online “conditional” selling method. It has longer timescales and less rigid requirements compared with traditional auction. Modern Auction is faster and more convenient than an estate agent sale on average. It also has lower fall-through rates, as buyers must pay a non-refundable reservation fee.

Modern auction key facts:

• Longer timescales mean modern auction is more accessible to a wider range of buyers.
• Winning bidders must pay a non-refundable reservation fee at the end of the auction.
• The buyer then has an “exclusivity period” (usually 56 days) to exchange and complete.
• The buyer can pull out at any point up to exchange but would lose their reservation fee.

Related: Modern Auction: The Top 15 Pros & Cons [A 2024 Seller’s Guide]

Top 5 reasons why people sell their houses by modern auction…

We’ve helped thousands of homeowners sell their properties over the years.

Based on our experience, here are the top 5 reasons why people choose to sell their house by modern auction:

1. Following bad advice
2. Speed
3. Certainty
4. Convenience
5. Price

Let’s start with the most concerning reason why people sell their houses by modern auction…following bad advice!

1. Bad advice

Unfortunately, in our experience, one of the main reasons people sell their house by modern auction is following bad advice!

Plenty of estate agents will recommend modern auction as a “great option” if you mention that you want, or need, a fast sale.

Do not follow their advice blindly…

Estate agents will get a hefty referral fee from the modern auction house once the reservation fee is paid on a property.

To put things into perspective, agents will usually make:

• 1.5% + VAT on any property worth over £250,000
• 2% + VAT on any property worth between £125,001 - £250,000
• A fixed fee of around £2,500 + VAT on any property worth less than or equal to £125,000

That is sometimes double what the estate agent would make selling the property themselves. By recommending modern auction to you, they get paid more for doing less!

Did you know… If the buyer withdraws from your sale, the reservation fee does not go to you, the seller. Instead, the auction house and estate agent would share the fee themselves and you’ll be back at square one…

If you find yourself on this page after your agent recommended modern auction, make sure you do your own research before you sign anything. From our experience, it’s more likely the agent is prioritising fees instead of looking out for your best interests.

You can read more about the pros and cons of modern auction here: Modern Auction: The Top 15 Pros & Cons [A 2024 Seller’s Guide].

2. Speed

One of the key reasons people choose to sell their house by modern auction is speed.

You can sell your home in as little as 12-16 weeks with modern auction. This is much faster than the average estate agent sale, which takes 25 weeks on average according to Zoopla.

Keep in mind that this is conditional on your property selling first time around which isn’t guaranteed.

Top tip: Need to sell even faster?

The fastest way to sell your home is to sell directly to a reputable house buying company. They can make you an offer within 24-48 hours and buy your house in as little as 7 days.

You can see if a house buying company is right for you for free by taking our quiz here.

3. Certainty

Another reason why people choose to sell their house by modern auction is the “added certainty”.

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

You’ve got to find a buyer first…and not every house that goes to modern auction sells.

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

That’s an even lower success rate than estate agents!

Top tip: Some modern auction houses might give you glowing success rates when they’re trying to win your business. BUT many auction houses use sneaky tactics to keep their success rates looking high so you can’t always trust the numbers…

3.1 Fall-through rate

Modern auction does offer much more certainty than selling with an estate agent once you agree a sale.

With modern auction, buyers must sign a “Reservation Agreement” and pay a non-refundable reservation fee to have the exclusive right to buy your property.

This additional (and expensive!) commitment means only around 5% of modern auction sales fall through once the reservation fee has been paid.

By comparison, a massive 31% of all estate agent sales fall through at least once before completion!

Just remember to keep the low success rate in mind when you’re weighing up if modern auction is right for you…

4. Convenience

Modern auctions are an easier and more convenient way to sell your house.

Modern auctions work very differently to estate agent sales.

With modern auctions, there are set timeframes and real commitments up front in the form of non-refundable reservation fees. Expectations are also set out from the get-go.

This means there’s much less stress and chasing for the seller (which are both common with estate agent sales).

All parties will be working together to achieve the set timeframes. Plus, you’ll only be dealing with serious buyers who have had to pay a hefty reservation fee.

This added convenience is a big reason why people sell their home by modern auction.

5. Price

If you’re looking for a faster than average sale, you’ll always have to make some sort of compromise on price.

Modern auction offers you a decent balance between speed and price. You’ll get a faster sale than with an estate agent and will get a better price than a genuine house-buying company could offer.

In our experience, properties in modern auctions tend to fetch around 85-90% of their market value.

By comparison, genuine, well-funded house buying companies usually offer in the region of 78-83% of your property’s market value.

Top tip: If you need to achieve full, or close to, market value, you’ll need to sell your home with a good, local estate agent.

Is modern auction right for you?

Despite being recommended by a number of agents across the country, modern auction is only right for a small percentage of home sellers.

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

If you want to find out if modern auction is right for you in the next two minutes, you can take our free quiz.

If modern auction seems like a good fit based on your responses, we’ll recommend our #1 Leading Auction House in your area. If not, you’ll have a chance to book a free chat with a Home Selling Expert to help you figure out your optimal selling method.

Click below to get started…