A traditional auction binds buyer and seller when the hammer falls. The modern method of auction doesn't. In a traditional (unconditional) auction in England and Wales, the winning bidder exchanges contracts on the day, pays a deposit of at least 10%, and completes on a fixed date, 20 business days later under the RICS Common Auction Conditions. In a modern method (conditional) auction, the winning bidder pays a non-refundable reservation fee and has a set period, commonly 28 days, to exchange, and then a further period to complete.
The fees fall differently, the buyers differ, and the rules that apply differ too. For a land seller, the choice comes down to how much you value a committed buyer on the day against a wider pool of buyers who need more time.
How does a traditional (unconditional) auction work?
A traditional auction is what most people picture: lots offered in a sale room, online, or both, with the buyer committed when the hammer falls. It can also run as an online timed auction, where the end of the bidding window acts as the hammer.
Most auctioneers in England and Wales use the RICS Common Auction Conditions (CAC, 5th edition, published July 2024). Under them:
- The contract. A successful bid is one the auctioneer accepts (condition A5.1), which in a room is the fall of the hammer. The buyer must then sign the sale memorandum and pay the deposit (A5.3), within the time the auctioneer's terms set.
- The deposit. The greater of 10% of the price or any minimum deposit the auctioneer sets in its extra conduct conditions (G2.1 and A6).
- Completion. 20 business days after the contract date, unless the special conditions set another date.
- Risk. From the contract date the buyer bears the risk of loss or damage, and the seller no longer has to insure (G3.1), subject to any tenancy.
- If the buyer defaults. Either side can serve a notice to complete giving 10 business days. If the buyer still fails, the seller can end the contract, forfeit the deposit, resell, and claim damages (G7).
The auction contract doesn't need the usual signed document to be valid. The Law of Property (Miscellaneous Provisions) Act 1989, section 2(5), disapplies the writing rule for contracts made at a public auction.
For the full timetable, see how a land auction works.
How does the modern method of auction work?
The modern method of auction is a brand name for a conditional auction, usually online. The RICS consumer guide to property auctions describes it this way: the fall of the hammer doesn't exchange contracts, and the winning bidder has instead bought an "option to exchange contracts" at the hammer price within a set number of days.
The usual sequence, as set out in HomeOwners Alliance's guide to the modern method of auction:
- Bidding. The property is marketed online with a bidding window, commonly around 30 days.
- Reservation. The winning bidder signs a reservation agreement and pays a non-refundable reservation fee. HomeOwners Alliance puts this at "usually at least 2.5% + VAT of the sold price, or a minimum of £6,000 inc VAT", split between the estate agent and the auction company.
- Exchange. The buyer has a set period, commonly 28 days, to exchange contracts.
- Completion. A further period, commonly 28 days, to complete. That makes 56 days in all.
The reservation fee is paid on top of the price and doesn't count towards it. If the buyer doesn't exchange, they normally lose it, and the fee goes to the agent and auction company under their terms, not to the seller. The seller is back on the market.
Buyers should also know that a fee paid to secure the property can count towards the price for stamp duty. HMRC's manual at SDLTM03720 says a fee is likely to be chargeable consideration if paying it is a condition of the contract, completion depends on it, or it's only payable once the purchase goes ahead. Whether a particular reservation fee counts is for the buyer's solicitor.
Traditional auction vs modern method at a glance
| Traditional (unconditional) auction | Modern method (conditional) auction | |
|---|---|---|
| When is the buyer bound? | On the fall of the hammer | At exchange, after the reservation period |
| What the buyer pays on the day | Deposit of at least 10% of the price, which counts towards it | Non-refundable reservation fee, on top of the price |
| Typical time to exchange | Same day | Commonly 28 days |
| Typical time to complete | 20 business days under the CAC | Commonly a further 28 days, 56 in total |
| If the buyer pulls out | Deposit at risk, plus a damages claim | Reservation fee lost; seller relists |
| Who pays the auction fee? | Mostly the seller, with some buyer fees | Mostly the buyer, through the reservation fee |
| Buyers it suits | Cash buyers, or finance arranged before bidding | Also buyers who need a mortgage |
| Shown as sold | At the hammer | Only after completion, under RICS guidance |
| Disposal date for CGT | Auction day | Date of exchange |
Who pays what, and what does it mean for your price?
In a traditional auction, the seller usually pays the auctioneer's commission, often with an entry or marketing fee, plus their solicitor's costs for the legal pack. Some auctioneers also charge buyers a premium or administration fee, and the ASA's guidance on auction guide prices says those non-optional fees must be stated next to the guide price.
In a modern method auction, most of the auction fee moves to the buyer through the reservation fee. HomeOwners Alliance also notes sellers may pay for the legal pack. Buyers aren't blind to the fee, though. HomeOwners Alliance's guide says "savvy buyers will work the reservation fee into the price they are willing to pay". The Property Ombudsman made the same point in 2019 when it told agents that a buyer-paid fee is a potential disadvantage of the method to explain to sellers, because buyers may lower their offers.
Illustration only, with made-up round numbers. A buyer has £300,000 in total to spend on a cottage with 10 acres (4 ha). The fees below are invented for the example, not quotes.
| Traditional auction | Modern method auction | |
|---|---|---|
| Buyer's total budget | £300,000 | £300,000 |
| Buyer fees on top of the price | £1,500 administration fee | £9,000 reservation fee |
| Most the buyer can bid | £298,500 | £291,000 |
| Deposit paid on the day | £29,850 (10%) | None; the fee is paid instead |
| Seller's auction fee | Commission and entry fee, per the terms | Little or none, per the terms |
What the seller keeps depends on their own fee in the traditional auction against the lower top bid in the modern method. Neither is always higher. Get both quotes in writing and work through the numbers for your own lot, with your land agent or a RICS-registered valuer if you have one. Our guide to the cost of selling land at auction covers seller fee structures in more detail.
Why does the buyer pool differ?
The difference is time. Twenty business days from hammer to completion is too short for most mortgage applications, so traditional auction buyers usually pay cash or have finance agreed before they bid. The RICS consumer guide notes that at a conditional auction the buyer "will usually have a longer period to arrange finance".
For land sellers, who your likely buyers are decides how much that matters.
- Bare land, woodland, and paddocks. Buyers are often neighbouring farmers, investors, or local buyers who can fund from their own resources or agreed farm finance. For these lots, the extra time may add few extra bidders.
- Lots with a house. A smallholding, farmhouse, or cottage with land draws buyers who may need a residential mortgage. The longer timetable can bring them in.
- Tenanted land. Investors buying let land tend to be used to traditional auction terms.
These are tendencies, and plenty of lots buck them. An auctioneer who knows your local market can tell you who is bidding on similar lots.
How are conditional auctions regulated?
Both kinds of auction sit under the same general law as other property sales, with some rules specific to conditional sales.
- Estate Agents Act 1979. Auctioneers selling land are doing estate agency work. Section 18 requires them to tell you before you instruct them when you'll owe a fee and how much.
- Redress schemes. Agents doing estate agency work on residential property must belong to an approved redress scheme, under the order-making power in section 23A of the Estate Agents Act 1979. The two approved schemes are The Property Ombudsman and the Property Redress Scheme. A lot with a house falls within that; the requirement is framed around residential property.
- The Property Ombudsman's code. Paragraph 4a of the TPO code for residential estate agents says the benefits and disadvantages of any recommended method of sale must be explained to the seller in clear terms.
- RICS professional standards. RICS's statement for auctioneers says conditional sale terms must be clear to the seller in the terms of appointment and clearly stated in all marketing, with an explanation for buyers of the risks and possible abortive costs. The special conditions and catalogue must say what money the seller or auctioneer keeps if the sale doesn't complete, and a conditional sale can't be shown as sold until it has completed. An April 2025 RICS practice alert repeated that last point, and added that guide figures must reflect the anticipated reserve and that every fee the buyer pays should be set out so they can work out the full cost.
- Money laundering checks. Auctioneers are estate agency businesses under the Money Laundering Regulations 2017. HMRC's guidance at AMLG2200 says checks on a seller must be done when the auctioneer agrees to list the land, and checks on a buyer before a binding contract, either by pre-registering bidders or by making the contract conditional on the checks.
- Advertising. Guide prices must follow the ASA's 2014 ruling on guide and reserve prices, and non-optional buyer fees, such as a reservation fee, must be shown alongside the guide.
What happened to the material information rules?
National Trading Standards' Estate and Letting Agency Team published guidance on material information in property listings in Parts A, B, and C. Its guidance said a reservation fee was material information to include on a listing. That guidance was built on the Consumer Protection from Unfair Trading Regulations 2008, which were replaced when Part 4, Chapter 1 of the Digital Markets, Competition and Consumers Act 2024 came into force on 6 April 2025. National Trading Standards withdrew the guidance in May 2025.
The duty itself didn't go. Leaving out information that an average consumer needs to make an informed decision can still be an unfair commercial practice under the 2024 Act, and the Competition and Markets Authority now has direct enforcement powers. The government consulted on new material information guidance from October to December 2025, for residential sales, and its home buying and selling reform roadmap, last updated in June 2026, commits to publishing non-statutory guidance and a code of practice for property agents in 2026. As of September 2026, sellers should expect any reservation fee to be shown clearly on the listing.
What does each type mean for a land seller?
Certainty. A traditional auction gives you a bound buyer and a completion date on the day. A modern method auction gives you a buyer who has paid a fee to hold the property, and a contract only at exchange, commonly four weeks later. Until then, the buyer's solicitor can raise enquiries, and the buyer can decide not to proceed.
Your own commitment. At a traditional auction you're bound at the hammer too. At a modern method auction, sellers usually agree in the terms of business to take the property off the market for the reservation period, and those terms can include fees if the seller withdraws. Read them before you sign.
Timetable. The modern method gives you longer to arrange vacant possession, end a grazing licence, or deal with an SFI or stewardship agreement. A traditional auction gives you 20 business days, unless your solicitor sets a longer completion date in the special conditions, which some buyers will accept.
Tax timing. Under TCGA 1992 section 28, the capital gains tax disposal date is the date of the unconditional contract. For a traditional auction, that's auction day. For a modern method sale, it's the date of exchange, which could fall in a different tax year. If a house is included, the residential part may need a 60-day CGT return after completion. Your accountant can confirm both.
Scotland. Both formats described here run under English law. In Scotland, auctions use articles of roup and a minute of preference, and most land sells by offers and missives. Auction vs private treaty vs tender covers the Scottish route.
For more on whether auction fits your land at all, see selling land at auction: pros and cons. For buyers' side of the process, including deposits and legal packs, see our guide to agricultural land auctions in the UK.
What should you ask an auctioneer before choosing?
- Is the sale conditional or unconditional? If conditional, how long are the exchange and completion periods?
- What do I pay: entry or marketing fee, commission, legal pack? When is each due, and what if it doesn't sell?
- What does the buyer pay on top of the price, and how is it shown next to the guide?
- If a modern method buyer doesn't exchange, what happens to the reservation fee, and can I relist straight away?
- What happens if I withdraw the land before the auction or during the reservation period?
- Which redress scheme and professional body do you belong to?
- Who has bought similar lots near me recently: cash buyers, mortgage buyers, investors, or neighbours?
Next steps
Get the facts that affect either format together first: title, occupation, agreements on the land, and your own timetable. Our guides to online land auctions and the auction legal pack for land cover the practical steps, and selling agricultural land with tenants covers let land.
AgLand doesn't choose a format for you or value your land.