Both formats end with a winning bid. Everything in between is different — fees, finance, timeline, and the kind of buyer you'll attract.
The two formats at a glance
| | Traditional | Modern Method (MMA) | | --- | --- | --- | | Contract type | Unconditional | Conditional | | Completion | 28 days | 56 days | | Buyer fee | ~3% premium | 4.2% reservation fee | | Buyer can use mortgage | Rarely (needs cash/bridging) | Yes — that's the point | | Seller fees | Often 0% | 0% | | Fall-through risk | ~3% | ~12% |
How Modern Method works
The winning bidder pays a non-refundable reservation fee (typically 4.2% inc VAT) on the day of the hammer. They then have 28 days to exchange contracts and another 28 to complete — long enough for a mortgage to be arranged.
If they cannot get a mortgage within the window, they lose the reservation fee but escape the contract. The seller relists.
How Traditional works
The fall of the hammer is the exchange. Buyer pays 10% deposit on the day. Completion is fixed at 28 days. No mortgage clause, no get-out. Defaulting buyers lose their deposit and face damages claims.
When MMA is right for a seller
- Property is in move-in condition and would suit owner-occupier buyers
- You can wait 56 days instead of 28
- The local market has strong mortgage-buyer demand
- You're prepared to relist if the buyer can't complete
When traditional is right for a seller
- You need certainty of completion
- Property suits investors and cash buyers (any property needing work)
- You want the highest possible probability of completion
- You'd rather have one buyer who definitely completes than two who might
How it affects the hammer price
MMA usually achieves a slightly higher hammer than traditional for the same property — because the buyer pool includes owner-occupiers willing to pay a small premium for the mortgage flexibility.
But: the seller doesn't see the reservation fee. The buyer's total cost (hammer + 4.2% fee) is similar to traditional (hammer + ~3% premium), and the seller's net is the same.
Which format suits your property
Many auctioneers run both formats. The right choice depends on the property profile and the seller's circumstances. Don't assume you know which is right; the same property can be a different fit depending on whether it's vacant or tenanted, refurbished or not.
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The takeaway
If your property is condition-challenged or you need fast certainty, pick traditional. If it's a finished family home and you can wait two months, MMA may net you more buyer interest. Either way, ask the auctioneer which their data says fits.