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.