The Modern Method of Auction (MMoA), also known as conditional auction, is an auction format that emerged in the UK in the 2010s and has grown rapidly since. It differs from traditional auction in one critical respect: the winning bidder has 28 days to exchange and a further 28 to complete (56 days total), rather than exchanging on the day itself.
This longer timeline makes it possible for mortgage-funded buyers to participate, which in turn widens the buyer pool but changes the risk profile for sellers.
MMoA vs traditional auction
| Feature | Traditional auction | Modern Method of Auction |
|---|---|---|
| Exchange | On the day, the moment the hammer falls | Within 28 days |
| Completion | Within 28 days | Within a further 28 days (56 total) |
| Buyer’s deposit | 10% on the day | ”Reservation fee”, usually 4.2% + VAT |
| Mortgage-funded buyers | Typically excluded (too slow) | Can participate |
| Commitment | Binding on the day | Non-binding until exchange |
| Seller commission | Sometimes paid by seller | Typically paid by buyer via reservation fee |
How MMoA actually works
- Seller lists the property with an auction partner (often a specialist firm, sometimes an estate agent).
- The property is marketed for 3–4 weeks, with a guide price and a reserve.
- Online auction opens. Bids are placed via a website.
- When the auction ends, the winning bidder pays the reservation fee, typically 4.2% of the purchase price plus VAT, minimum £6,000 or so.
- The winning bidder has 28 days to exchange contracts.
- Completion follows within a further 28 days.
- The reservation fee is non-refundable: if the buyer fails to exchange, they lose it.
Pros for sellers
- Wider buyer pool: mortgaged buyers included.
- Usually no seller fee: reservation fee is paid by the buyer.
- Faster than open market: 56 days is half the typical open-market timeline.
- Exchange usually happens: the lost reservation fee is a strong incentive for buyers to complete.
Cons for sellers
- Buyer can still walk away (losing the reservation fee) up to exchange. Unlike traditional auction, the sale isn’t legally binding on the day.
- Reservation fee is marketed as “buyer’s premium” but effectively reduces what a buyer pays the seller. On a £300,000 sale, the buyer is paying £312,600 total (£300k to seller + £12,600 reservation fee + VAT). Savvy buyers factor this into their bids, meaning the seller receives 4% less than they would on an open-market sale at the same “headline” price.
- Conditions and guide prices can mislead. Guide prices are sometimes pitched low to attract attention, with a separate reserve price that is never disclosed.
- Confusion risk. Some sellers don’t realise how MMoA differs from traditional auction until they read the contract.
MMoA vs cash sale
For sellers weighing quick-sale options, the comparison is:
- MMoA: 56 days from end of auction to completion, mortgage-funded buyers allowed, reservation fee paid by buyer (but effectively depresses the headline price), non-binding until exchange.
- Cash sale to a cash buyer: 7–14 days typical completion, no mortgage dependency, written offer from acceptance, principal buyer with funds ready.
MMoA can be a reasonable middle path if the property is well-suited to it (good kerb appeal, wide buyer interest, not time-critical) and the seller understands the fee structure. For properties that aren’t well-suited to auction (unmortgageable, probate, chain-break rescue), a direct cash sale is usually quicker and cleaner.
Regulation
MMoA is regulated under consumer protection legislation including the National Association of Property Buyers code (where the seller firm is a member) and by the Property Ombudsman scheme. A well-established MMoA provider will be a member of both.
Related
- Cash buyer: the alternative fast-sale route without fees.
- Quick house sale company: the broader industry category.
- Exchange of contracts: when an MMoA sale becomes legally binding.