Traditional Auction vs the Modern Method of Auction: what’s the difference?
Property auctions can offer sellers a faster, more secure route to sale, but not every auction method works in the same way.
Two of the main options are Traditional Auction and The Modern Method of Auction (MMoA). Both offer competitive bidding, greater buyer commitment and clear timescales, but there are important differences in when the buyer becomes legally committed and how long they have to complete the purchase.
What is Traditional Auction?
Traditional Auction terms are the faster of the two methods. When the winning bid is accepted, contracts are exchanged immediately and the buyer pays a deposit, making them legally committed to the purchase.
Completion usually takes place within 28 days. Because of the immediate exchange and shorter timeframe, this method can be more suited to cash buyers who are ready to move quickly.
What is the Modern Method of Auction?
The Modern Method of Auction (MMoA) offers a longer completion timeframe while still providing the competitive bidding, commitment and transparency associated with auction.
Rather than exchanging contracts immediately, the successful buyer pays a Reservation Fee to secure the property within a fixed timescale, which is usually 56 days* to complete from receipt of the draft contract for standard properties. This additional time gives buyers more flexibility to arrange their finances and means the method can accommodate mortgage buyers as well as cash buyers.
So, what’s the main difference?
It largely comes down to timescale and buyer commitment.
Traditional Auction usually completes within 28 days. If bidding reaches the Reserve Price, contracts are exchanged when the auction ends and the buyer pays a deposit, creating an immediate legal and financial commitment to the purchase.
MMoA usually completes within 56 days*, with the successful buyer paying a Reservation Fee to secure the property. This gives buyers more time to arrange their purchase while still providing commitment to the transaction.
Which Auction method could be right for you?
Both Traditional Auction and MMoA can be suitable for a wide range of properties. Auction is a circumstance-driven method of sale, despite the common misconception that it’s only for run-down properties and investors. The right method is less about the type or condition of the property and more about the circumstances of the sale and what matters most to the people involved.
For sellers, if completing in the shortest possible timeframe is a priority, or the property may be less suitable for mortgage buyers, Traditional Auction could be a good option, particularly where cash buyers are likely to be more active. MMoA offers a longer timeframe that can accommodate mortgage buyers, while still providing the speed, security and transparency associated with auction.
For buyers, the key consideration is how quickly you can be ready to proceed. Traditional Auction requires you to be prepared for immediate exchange if you’re successful, whereas MMoA provides more time to arrange your purchase and progress towards completion.
Your Estate Agent can explain both methods and help you understand which option could be right for your circumstances.