"So, the apartment is valued at £180,000," I say, very slowly, "but you're selling it online for less than £9,000." Former Bupa IT boss Asmat Monaghan and her two daughters, Amberine and Hinna smile and nod patiently.

Experience has taught me that, in the property world, any number that sounds too good to be true is exactly that. I'm equally suspicious of internet bargains. When I put the words "property", "internet" and "bargain" into the search engine of my brain, the result is " scam".

But as I turn from the women's smiling faces toward their yellow and red brick apartment, with its mock-Tudor garret, I'm straining to find the catch. Sure, this flat in Woking is nothing special. It's like thousands of other homes that sprang up in the commuter towns around the M25 30 years ago and have made a tidy profit for those who've bought and sold them ever since.

Inside, the place is in good nick. It has two white-walled bedrooms, a spacious lounge with a walk-through kitchen and decent-sized bathroom. Asmat's daughter, Ambereen, bought it back in 2001 for £126,000. And now she's going to hand the keys over to somebody who's paid under £9,000, while hopefully realising the full £55,000 profit she'd be making if she sold in the usual way.

Want to know how she thinks she's going to do it? Over a coffee in the local Starbucks, Asmat, 47, and Amberine, 29, explain the original concept behind their new property auction website: humraz.com. It was born out of the family's move from Scotland to Surrey in 1994 and their shock at property prices.

While her daughters were at university, Asmat says: "the worry that they would never get onto the property ladder was always at the back of my mind. Luckily, we were able to get them there with some savings and some loans, but that's not the case for all young people. Many of those who graduated with Amberine have moved back into their parents' homes to save up a deposit but the prices are just accelerating out of reach. I kept thinking there must be a cheaper way to do this."

Then on a trip to India the family found themselves watching a televised auction in which the lowest unique bid won the item. There was a fee for each bid. Once enough people's bid fees had covered the price of the lot, laptops worth £1,000 could go for as little as tuppence.

"This was all electronic items, which depreciate," says Asmat, " but nobody was doing it with property. We realised it could work. No one individual would be covering the cost of a property which would otherwise have been out of their reach." Asmat's background is in IT and management consultancy, while Amberine's is in law and accountancy, so between them they were able to put the business together. Because Amberine had moved into her grandfather's house after he died, they decided to launch the site with the spare property they already had. "We wanted to be completely certain of handing over the property without any problems."

It's a type of lottery, isn't it? I ask the Humrazzers. They wince. They don't think that's accurate. Because when a person bids, they are informed whether the current winning bid is higher or lower than their own. "So I think it's far more skill-based than a lottery. You can work out how to position yourself."

So it's more like poker? "Well..." Asmat cringes again. "I suppose some of the skills are poker-based." For a bidder to position themselves with any degree of accuracy they'd probably have to bid a few times at £3 a go. I envisage one of my home-hungry friends bidding £12 a week to stay in the game – £12 a week that might be better saved towards a deposit. This is, after all, a form of gambling.

"You could put together a syndicate," says Asmat, "and that would increase your chances. You could then end up sharing a property or selling it and splitting the profit for a group of deposits. If we did get to a point where we felt people were gambling too much, we would try to contain the problem." And as a show of good will, they'll donate 2.5 per cent of the £180,000 value to War Child when the auction's completed.

The £3 per bid fee is small beans compared to the costs incurred by participants in a traditional property auction. "We researched the cost of the professional services generally conducted prior to property auctions, such as lawyers and surveyors," says Asmat. "Pre-auction fees can cost upwards of £1,000 – with no guarantee of winning the desired property.

For every auction winner there will be at least one other losing bidder who effectively wastes a significant chunk of their nest egg. Based on a conservative estimate of two disappointed bidders per lot and 60 per cent of those bidders spending £1,000 on pre-auction surveys, legal checks and mortgage arrangements, we calculated that £21,963,600 was wasted in 2006. "

Their problem now is convincing the public that the site is legitimate. " We've been surprised by the suspicion. We're doing everything by the book. My husband is the type of man who can't even cope with a red utility bill, we're that cautious about everything," Amberine says. "We can't access the data while the auction is live so there's no way we could fix it. Plus we found an Ofcom regulation which says this is a genuine auction because people bid competitively and a payment is made for each bid."
So let's get those suspicions out in the open. If you win the auction, then, yes, you do have legal costs to pay to buy the house – around £600. You can't view the flat before you bid (it's just impractical) but you can pull out after you've won. If there is no unique lowest bid, then the auction is won by the first person to have bid at the lowest figure with the fewest bids.

A minimum number of bids have to be placed for the auction to go ahead – as they have to at least cover their costs. If that doesn't happen, the flat remains unsold but the winner will receive £3,000 plus their bid money back.

They say they cannot specify how many bids they need at this stage, as different methods of bidding (whether by text message or directly from the website) make them different amounts. So is this the catch – that they will only let the auction complete if an unrealistic amount of bids are placed? Time will tell.

In the meantime, they're faced with another problem: waiting for the public to grasp the concept: "People do still have a problem understanding it," they admit, "although it seemed really obvious to us. But we thought people might find it easier to grasp if there were items of smaller value on the site." They wanted to auction something that, like property, would represent a solid, non-depreciating investment. So they opted for gold bars, and three have gone for a song so far. One bar, worth £1,300, went for to a man who'd made just one bid – for one penny.

Although Asmat and Amberine can't know for sure how long it will take for the house to reach its target price and one lucky bidder to get the keys for less than £9,000, they think it will go in a couple of weeks' time.

Bids have been pouring in from around the world. The publicity has led to enquiries from entrepreneurs wanting to replicate the model in Hungary, Australia and Singapore. The company has other properties waiting for auction including a £400,000 flat in Surbiton. So, will thousands of properties be sold this way? It's too early to say. "At the moment," says Asmat, "we're just covering costs and waiting to grow."

How the auction works

How can a bid be placed?

You must be over 18 to bid in the Humraz auctions. First, register at www.humraz.com, then follow instructions to bid either online or by text message.

Who wins?

The person who places the lowest unique bid. You can bid from a penny to £9,000. For instance, if you bid 3p, and no one else does, but there are at least two bids of 1p and 2p, then you win.

What if there are no unique bids?

In this scenario, the auction is won by the person who was first to place a bid at the lowest price that has the fewest bids. For example, if you were the first to bid at £6.03, and only one other person does, but all lower amounts have more than two bids, then you win.

How do I know if my bid is successful?

After placing a bid, you receive a message telling you whether or not your bid is unique, and whether or not it is the lowest.

So how does Humraz make its money?

Placing a bid costs £3. Humraz hopes that enough bids will be placed to raise at least the usual £180,000 asking price of the flat.

What if not enough people bid?

In the event that Humraz fails to attract enough bids, the auction is cancelled, and the winner receives £3,000, plus their bid fees. Humraz is not saying how many bids are needed, stating that costs and revenues are unclear at this early stage.

If I win – what happens next?

You are invited to see the flat. At this point you can pull out and the second-placed bidder becomes the winner. If you go ahead with the purchase, you pay the price of your winning bid, and face legal fees estimated at £600. Humraz donates a sum equivalent to an estate agent’s fees (2.5 per cent of the value of the home) to the charity War Child.