Modern method of auction
The modern method of auction is an online property sale, usually run through an estate agent in partnership with an auction platform, in which the winning bidder pays a non-refundable reservation fee at the end of the bidding and then has a fixed period, normally 56 days, to exchange contracts and complete. It differs from a traditional property auction in three ways: contracts are not exchanged when bidding ends, the buyer's cost is a reservation fee rather than a buyer's premium and a 10% deposit, and the longer timetable lets buyers with a mortgage take part.
The fee.
The reservation fee at the largest operator, iamsold, is 4.2% of the purchase price including VAT with a minimum of about £6,000 as at September 2026; it is paid on winning, is not refundable if the buyer withdraws, and does not form part of the purchase price, so it comes on top of the price, stamp duty and legal costs. The seller usually pays no auction commission, though the estate agent's fee still applies, which is why agents promote the format.
The timetable
Bidding runs online for a set period, often 30 days, against a reserve price the seller sets. On winning, the buyer pays the fee and signs a reservation agreement; exchange of contracts follows within 28 days and completion within a further 28. Because nothing is legally binding until exchange, either party can in principle withdraw during the reservation period; the buyer forfeits the fee, the seller may face a claim for the buyer's costs under the reservation agreement.
Fall-through
Because exchange is deferred and mortgage buyers are admitted, the fall-through rate is higher than traditional auction, around 12% against about 3%, per the May 2026 Your Property Check comparison.
Who it suits
A seller of a move-in-ready property who wants a wider pool than the investor room and is prepared for a longer, less certain timetable. It suits buyers less well: the fee is the highest in the market and can suppress the price paid, and a landlord buying investment stock is usually better served in a traditional room with a bridging loan for the 28 days. Instruct a conveyancer who has reviewed the reservation agreement before you bid; see the best conveyancers for buy-to-let landlords.
From working with landlords across the UK, the format's reputation among buyers comes down to one line in the reservation agreement: the fee is lost if the sale does not complete, whatever the reason. Read that line before bidding.
Frequently asked questions
Is the modern method of auction any good?
For sellers of owner-occupier stock, it widens the buyer pool at a longer timetable; for buyers, the 4.2% fee and deferred exchange make it the most expensive and least certain way to buy at auction. Traditional and modern are compared in the best property auction houses for landlords.
What happens if the property does not sell?
If bidding does not reach the reserve the property is unsold and the agent will usually continue to market it, by private treaty or a further auction cycle. Whether to sell at auction at all is covered in selling a rental property.
How much does it cost to sell?
Usually no auction commission, but the estate agent's fee, typically 1% to 1.5%, and any marketing costs in the agreement.
Can a buyer pull out?
Yes, before exchange, at the cost of the reservation fee and possibly the seller's costs under the reservation agreement.
Last reviewed: September 2026.
