Traditional vs Modern Method of Auction
When it comes to buying or selling property at auction, it's important to understand the two main methods: Traditional Auction and the Modern Method of Auction. Here's a breakdown of the key differences:
Traditional Auction:
Speed: Very fast-paced.
Bidding: Takes place on a fixed date and time, either in person or online.
Contract Exchange: Contracts are exchanged immediately on the fall of the hammer.
Deposit: Buyer pays a deposit (typically 10%) immediately.
Completion: Usually required within 28 days.
Certainty: High certainty of sale.
Buyer's Financials: Suited for cash buyers or those with pre-approved finances.
Property Type: Often used for properties needing renovation, development, or quick sales.
Modern Method of Auction (MMoA):
Speed: Slower than traditional auctions, but faster than private treaty.
Bidding: Takes place online over an extended period, often several weeks.
Contract Exchange: Buyer pays a non-refundable reservation fee to secure the property, but contracts are exchanged later.
Deposit: No deposit is paid on the day of the auction, but a reservation fee is required.
Completion: Buyer is given a longer period to exchange (typically 28 days) and complete (typically 56 days).
Certainty: Less certain than traditional auctions, as the buyer has time to arrange finance and conduct due diligence.
Buyer's Financials: More accessible to a wider range of buyers, including those needing a mortgage.
Property Type: Suitable for a broader range of properties, including those in good condition.
Which is Right for You?
Choose a Traditional Auction if:
You want a fast, certain sale.
You are a cash buyer or have finances readily available.
The property needs significant work or a quick sale.
Choose Modern Method of Auction if:
You want a longer bidding period and more time to arrange finance.
You are a buyer who needs a mortgage.
The property is in relatively good condition.
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