A modified domain reduction method (MDRM) that introduces damping terms to the original DRM is presented in this paper. To verify the proposed MDRM and compare the computational accuracy of these two methods, a numerical test is designed. The numerical results of the MDRM and DRM are compared using an extended meshed model. The results show that the MDRM significantly improved the computational accuracy of the DRM. Then, the MDRM is compared with two existing conventional methods, namely Liao’s transmitting boundary and viscous-spring boundary with Liu’s method. The MDRM shows its great advancement in computational accuracy, stability and range of applications. This paper also discusses the influence of boundary location on computational accuracy. It can be concluded that smaller models tend to have larger errors. By introducing two dimensionless parameters, φ₁ and φ₂, the rational distance between the observation point and the MDRM boundary is suggested. When φ₁>2 or φ₂>13, the relative PGA error can be limited to 5%. In practice, the appropriate model size can be chosen based on these two parameters to achieve desired computational accuracy.