Buying a House at Auction? Read This First
A conveyancing solicitor's diary entry published this week by Today's Wills and Probate's sister title, Today's Conveyancer, tells an uncomfortable story: a buyer purchased a property through the Modern Method of Auction, only for the lender's own valuer to flag serious structural defects the moment the survey was carried out — defects the estate agent had known about all along. The property had already fallen through twice with two previous buyers, both unable to get a mortgage because of exactly the same problem. Rather than come clean, the agent simply moved the listing into an online auction, collected a non-refundable reservation fee, and left the new buyer to discover the truth for themselves.
It's a stark illustration of a problem that's been quietly building as more sellers turn to online property auctions. If you're thinking about buying this way, here's what you need to understand before you place a bid.
What Is the Modern Method of Auction, and Why Does It Catch People Out?
The Modern Method of Auction (MMA) is different from a traditional auction room. Instead of exchanging contracts on the fall of the hammer, buyers pay a reservation fee — often around 5% of the purchase price, with a minimum that frequently runs to several thousand pounds — to secure the property, then have up to 56 days to complete, much like a normal purchase. That extended timeline is sold as a benefit, giving buyers time to arrange a mortgage. The catch is the reservation fee. It's non-refundable in almost all circumstances, even if your mortgage application is declined or your solicitor's searches turn up something the seller didn't mention. Complaints to the Property Ombudsman about MMA sales have been rising, with buyer confusion cited as a recurring theme.
Why Sellers and Agents Sometimes Prefer It
An auction listing doesn't automatically mean a property is trouble-free, and it's worth being alert to the pattern described in this week's warning: a property that has already fallen through with more conventional buyers, for reasons that were never disclosed, quietly reappearing in an online auction where a new buyer has far less time and far less leverage to walk away without losing money. There's nothing inherently wrong with buying at auction — plenty of legitimate sales go through this route — but as one conveyancer put it, "there is always a reason why a property is being sold at auction." Buyers are entitled to ask what that reason is.
What to Do Before You Bid on an Auction Property
The single most important step is instructing a conveyancing solicitor to review the legal pack before you commit to anything, not after. Legal packs for auction properties are usually available to download once a property is listed, and a solicitor can flag missing searches, restrictive covenants, leasehold issues, or red flags in the title well before your reservation fee becomes non-refundable. It's also worth asking directly, in writing, whether the property has previously been listed for sale and why any earlier sale didn't complete — a seller or agent who won't answer plainly is telling you something. Arranging a survey, and ideally speaking to a mortgage broker about lending on the specific property type, before you bid rather than after, can save you from a reservation fee lost to a property that was never going to be mortgageable.
What If You've Already Paid a Reservation Fee
If you've already reserved a property and something concerning has come up in your solicitor's enquiries, don't assume you're automatically stuck. Reservation fee terms vary between auction providers, and some contracts do include specific conditions under which a fee is refundable. A solicitor can review the exact terms you signed and advise on your realistic options, including whether raising a formal complaint with the auction house or the Property Ombudsman is worthwhile.
What Should You Do Next?
Buying at auction can be a genuinely good route into a property, but the compressed timeline and non-refundable fees mean the legal groundwork has to happen earlier than in a standard purchase — ideally before you bid, not after. QualitySolicitors' first contact team can talk you through what to check before you commit to an auction property and match you with an experienced local conveyancing solicitor from our network who can review a legal pack quickly and tell you honestly what you're taking on. Get in touch before your next auction closes.