The Modern Method of Auction (MMoA) — sometimes called “conditional auction” — has grown rapidly in the UK residential market since the mid-2010s. It sits structurally between a traditional auction (binding on the day, 28-day completion) and an open-market sale (non-binding, 12–18 week timeline). For many sellers, it feels like a “faster open-market” option.
But the pricing dynamics are often misunderstood, and the comparison with a direct cash-buyer sale matters.
How Modern Method of Auction works
- You list with an MMoA provider (e.g., iAM Sold, Auction House Live, Whoobid). Typically no upfront fee to the seller.
- Property is marketed for 3–4 weeks on Rightmove, Zoopla, and the MMoA provider’s platform. A “guide price” is displayed (often aspirational) and a “reserve price” is set (confidential).
- Online auction period opens. Bids are placed via the provider’s website. Bidders do not need to be cash — mortgaged buyers can participate because they have 56 days from winning to complete.
- Auction closes. The winning bidder pays a non-refundable reservation fee — typically 4.2% of the purchase price + VAT, minimum £6,000.
- 28 days to exchange contracts. Buyer’s mortgage and legal work must complete.
- Further 28 days to complete (56 days total from auction end).
If the winning bidder fails to exchange in 28 days, they lose the reservation fee. The property can be re-listed.
The reservation fee — what it actually is
The reservation fee is marketed as “paid by the buyer”. In practical economic terms, it’s effectively paid by the seller through lower bid prices.
On a property where a buyer would pay £300,000 via normal sale, they will typically bid up to around £287,400 at MMoA — because they know they’re also going to pay the 4.2% + VAT (£15,120) reservation fee, and their total cash outflow is roughly equivalent either way.
In other words: the seller receives less than the headline bid price would suggest at an MMoA sale. The bid is effectively discounted by the reservation fee that the buyer is paying to someone else.
Comparison at a glance
| Modern Method of Auction | Cash buyer | |
|---|---|---|
| Listing fee | Often £0 | N/A |
| Timeline to completion | 56 days | 7–14 days |
| Mortgaged buyers | Allowed | N/A (we’re cash) |
| Seller fees | Often 0 upfront, sometimes commission | £0 |
| Buyer reservation fee | 4.2% + VAT of purchase price | None |
| Binding on buyer | 28-day exchange window | 24 hours typical |
| Non-completion consequence | Buyer loses reservation fee, property re-listed | Buyer pays deposit penalty if they walk post-exchange |
Worked example: £280,000 property
MMoA
- Winning bid: £280,000 (headline)
- Buyer pays reservation fee separately: £11,760 + VAT (£14,112)
- Buyer’s total cash cost: £294,112
- Seller receives: £280,000 (before any commission, if applicable)
- Timeline: 56 days
- Fall-through risk: buyer loses reservation fee but can still exchange late or not at all
Cash buyer
- Offer: £246,400 (88% of market — our offers reflect the lower reservation fee buyers would face at MMoA)
- Seller receives: £246,400
- Timeline: 7–14 days
- Fall-through risk: near-zero post-exchange
Headline gap on this property: £33,600 (about 12%).
The fair comparison, though, factors in:
- Carrying costs during 56 days of MMoA vs 14 days of cash sale: ~£1,200 additional
- Timing certainty: MMoA can fail if buyer doesn’t exchange, requiring re-listing and another 56-day cycle
- Stress of a two-stage uncertain timeline — post-auction but pre-exchange, with buyer finance still unresolved
When MMoA is the right choice
- Standard mortgageable property in an area with active buyer demand.
- You can tolerate 56-day timeline and the risk of a failed auction.
- Strong confidence in the property’s open-market appeal — bidding competition helps drive price.
- You value public exposure — the listings work in parallel with open-market marketing.
When cash buyer is the right choice
- Time sensitivity — a chain break, repossession rescue, or probate completion.
- Property features that might not auction well — cladding issues, short lease, structural concerns.
- You value certainty — the MMoA-to-exchange conversion rate is genuinely variable.
- Privacy preference — no public listings, no auction drama.
The honest caveats on MMoA
- “Guide price” ≠ “expected sale price”. Guide prices are frequently pitched 10–20% below what the reserve is set at, to attract bidders. A property listed at “guide price £250,000” may have a reserve of £290,000 and sell for £310,000 — or may have a reserve of £290,000 and not sell at all.
- Reservation fee isn’t a deposit that applies to the purchase price. It’s an additional payment to the auction provider.
- The 28-day-to-exchange window is real pressure. Mortgaged buyers sometimes fail to complete mortgage applications in 28 days; the deal then falls through, the reservation fee is lost, and the seller is back on market.
- Re-listing after a failed MMoA takes time. Many providers require a cooling-off period and new marketing.
Related
- Cash buyer vs traditional auction
- Cash buyer vs estate agent
- Three-way comparison
- Modern Method of Auction in our glossary
Get a cash offer
MMoA can work well for the right property. For everything else, a direct written offer within 24 hours is often the faster, cleaner route. Share your postcode — no obligation.