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Modern method of auction vs traditional auction: fees, timeline and who carries the risk

Modern method of auction vs traditional auction: when each side is bound, how long exchange takes, what the reservation fee is and who carries the risk.

4 min read
Last reviewed 4 November 2026
By Your Property Check team

Part 1 of 5

The short comparison

General information, not advice. The modern method of auction is also called a conditional auction. Nothing is legally binding when bidding closes: the buyer pays a reservation fee, and the sale only becomes binding at exchange of contracts. In a traditional (unconditional) auction the contract is made as soon as the hammer falls. The RICS consumer guide page puts it plainly for that route: the successful bidder is legally obliged to complete the sale once the hammer falls.

	Modern method of auction	Traditional auction
When both sides are bound	At exchange of contracts, after the reservation period	When the hammer falls
Bidding	Usually online, often over a period	On a set day, in a room, online or both
What the buyer pays up front	A non-refundable reservation fee	A deposit, commonly 10%
Time to exchange	Commonly 28 days	On the day
Time to complete	Commonly a further 28 days	Usually about a month after exchange
Can the sale still fall through?	Yes, before exchange	Much less likely, because the contract is made at the hammer

The timings above come from the EIG Property Auctions glossary (28 days to exchange and a further 28 to complete) and the Housing Online Association guide (traditional sales exchange on the day with a 10% deposit and the balance usually due about a month later). Firms set their own terms, so the legal pack for the lot is the final word.

Part 2 of 5

Timeline: what happens and when

In a traditional auction the sequence is short. The lot is bid on, the hammer falls above the reserve, the buyer signs and pays the deposit, and completion follows. SDL Auctions' own guide, dated March 2021, shows one version: a 10% deposit with a £5,000 minimum, and completion within 20 business days unless the special conditions say otherwise. Other firms use other periods, so do not assume one number.

In a modern method sale, the Housing Online Association says the bidding period is often around 30 days, though it can be shorter. Then the clock runs for exchange and completion. SDL's March 2021 conditional route gave a 40 business day exclusivity period to exchange and complete. The two examples (28 plus 28 days, and 40 business days) are different, which is the point: check the reservation agreement.

Part 3 of 5

The reservation fee

EIG's glossary describes the reservation fee as non-refundable and paid by the highest bidder who meets or exceeds the reserve. The Housing Online Association guide says it is usually at least 2.5% plus VAT of the sold price, and gives an example of £8,250 including VAT on a £275,000 property. It also reports the following points for buyers:

The fee has to be paid straight away and cannot come from mortgage funds.
Stamp duty is charged on the price plus the fee, according to that guide.
Surveys are often done after bidding, so a problem found later may not be something you can renegotiate.
If the seller cannot exchange in time, the buyer is not always refunded, and the guide reports complaints about this.

SDL's March 2021 conditional terms stated a reservation fee of 4.8% including VAT up to £250,000, or 3.6% including VAT above that, with a £6,000 minimum in England and Wales, and said all fees and deposits are non-refundable. That document is old, so treat it as an example of how much terms differ, not a current price list.

Part 4 of 5

Who carries the risk

The buyer carries the cost of walking away. In a modern method sale it is the reservation fee. In a traditional sale the buyer is already bound at the hammer, so withdrawing risks the deposit and more.

The seller carries different risks. In a traditional auction a sale at or above the reserve is made on the day. In a modern method sale the property can be reserved and still fall through before exchange, after weeks of waiting. The seller should ask the auctioneer who keeps the reservation fee, what happens to it if the buyer withdraws, and what happens if the sale fails because of a legal problem. These arrangements are set in the seller's agreement, not by one national rule.

Reporting the result is also covered. The RICS practice alert on auction sales says that for conditional sales all sale terms must be met and the final price recorded before a property is marked as sold. A listing that shows "sold" at bidding close is not the same as an exchanged contract.

Part 5 of 5

Choosing between them

A traditional auction suits a seller who wants certainty on a set date and a property with a legal pack ready. A modern method sale may suit a buyer who wants time for a survey and finance, and a seller whose property needs wider online exposure. Neither is a promise of a sale or a price. Compare the sale routes side by side with our sale method comparison, see how fees add up in the auction cost calculator, and read how guide and reserve prices work in our article on guide price vs reserve vs sale price.

This page is general information, not advice. Terms were checked on 4 November 2026; ask the auctioneer for the current ones.

Our take

Weigh where the risk sits before you pick an auction route

A traditional auction binds both sides when the hammer falls, while a modern method sale is conditional until exchange, so it can still fall through and the buyer's reservation fee is non-refundable. We think sellers should weigh who carries the risk first. A traditional auction suits those who want certainty on a set date with a legal pack ready.

What Your Property Check adds: our sale method comparison tool compares auction, estate agent and cash buyer on net proceeds and timescale, and our auction cost calculator is there when you want to cost an auction route.

Compare sale routes

Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

What is the modern method of auction?

A conditional online auction. The winning bidder pays a non-refundable reservation fee when bidding ends, and the sale only becomes binding at exchange of contracts, commonly 28 days later, with a further 28 days to complete.

How is it different from a traditional auction?

In a traditional auction both sides are bound when the hammer falls, with a deposit paid on the day. In the modern method nothing is binding until exchange, so either side can still pull out, and the buyer risks the reservation fee.

Is the reservation fee refundable?

EIG describes it as non-refundable. The Housing Online Association guide reports that a refund is not certain even where the seller caused the delay. Read the reservation agreement before bidding.

How long does a modern method sale take?

The Housing Online Association says bidding is often around 30 days, then commonly 28 days to exchange and 28 to complete. Some firms use other periods, such as the 40 business days in one March 2021 guide.

Which is better for a seller?

Neither is better in every case. A traditional auction gives a binding sale on the day; the modern method gives longer exposure but a sale that can still fall through before exchange. Ask the auctioneer for the fee and reservation terms in writing.

Where this comes from

Sources

Last reviewed 4 November 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.