The modern method of auction, properly called conditional auction, gives the winning bidder a reservation period, commonly 28 days to exchange contracts and a further 28 to complete, in return for a non-refundable reservation fee. It opens auction to mortgage buyers, which widens the bidding on ordinary homes, and it carries costs that deserve to be stated plainly, because the reservation fee model is where sellers and buyers are most often surprised. This guide states them.
How conditional auction differs from traditional
Traditional auction exchanges on the fall of the hammer: the buyer pays a deposit that day, completion follows on a fixed date, and only cash-ready buyers can safely bid. Conditional auction inserts the reservation period, so a buyer with a mortgage to arrange can take part; what binds them is the reservation fee, which they lose by walking away. The trade is certainty for reach: traditional buys the strongest commitment, conditional usually buys the bigger audience. Our Selling at auction page covers when each suits, and when neither does.
The costs, and who pays them
For the seller with us: our fee is 0.8% of the sale price with a £1,800 minimum, including any VAT, the same as any sale, plus a marketing fee from £300 on instruction which forms part of the final invoice, and Trent Law Solicitors' quote for the auction sales pack. For the buyer on the conditional method: the reservation fee, set by the auction platform, is typically paid on top of the winning bid and is not refundable; a buyer should price their true total as bid plus fee, and a seller should understand that bidders do exactly that, so the fee is economically shared however it is labelled. The platform's own charging model differs between auctioneers, which is why we name the platform, its fee and who carries it in one written note before your property is marketed. Nothing about auction requires cost surprises; they persist in this market only because stating everything up front remains, regrettably, rare.
Two cautions complete the honesty. A reservation fee is sometimes not counted within the purchase price for mortgage lending, which a bidding buyer must confirm with their lender or broker in advance; Trent Finance can advise our clients. And stamp duty is generally assessed with the fee counted in when it secures the purchase, a point on which the buyer's conveyancer advises. General information, not advice on a particular transaction.
