Buying property at auction in Australia
How auction sales work
Property auctions are a common method of sale in Australia, particularly in Sydney and Melbourne. On auction day, registered bidders compete openly, and the highest bid above the reserve price wins. The moment the auctioneer’s hammer falls, the winning bidder enters into an unconditional contract — there is no cooling-off period and no ability to withdraw without forfeiting the deposit.
Registering to bid
In most states and territories, you must register your intention to bid before the auction begins. You will need to provide:
- Proof of identity (driver’s licence or passport)
- Proof of authority to bid — if bidding on behalf of another person or a company, bring a written authority
Registration typically takes place on the morning of the auction. Some agents accept online pre-registration. You will be issued a bidder number displayed during the auction.
Preparing before auction day
Because buying at auction is unconditional, preparation must be completed before you bid:
- Finance approval: have a formal loan offer (not just pre-approval) in place. Speak to your lender about a bridging condition if needed. You will need to pay the deposit immediately — typically 10% of the purchase price — on the day.
- Contract review: obtain the Vendor’s Statement (Section 32 in Victoria) or equivalent disclosure document and have your solicitor or conveyancer review the contract of sale before auction day.
- Building and pest inspection: arrange independent inspections of the property before the auction. You cannot make a winning bid conditional on inspection results.
- Strata records (apartments): request and review the owners corporation records if buying a strata property.
On auction day
Arrive early. The auction may be held at the property, in an auction room, or online. Key points:
- The reserve price is the minimum price the vendor will accept. It is confidential and set by the vendor before the auction.
- If bidding does not reach the reserve, the property is passed in. The highest bidder typically has the first right to negotiate with the vendor after the auction.
- The auctioneer may announce a vendor bid (a bid made on the vendor’s behalf) to start or stimulate bidding — this must be declared clearly.
- Bid clearly and confidently. Raise your bidder number and state your amount if required.
Passed-in negotiations
If the property is passed in, negotiations between the highest bidder and the vendor begin immediately. At this point, you may be able to negotiate a purchase price — but the contract will still typically be unconditional, so all pre-auction preparation remains essential. If negotiations with the highest bidder fail, the agent may approach other registered bidders.
Cooling-off periods do not apply
Under most Australian state and territory property laws, no cooling-off period applies to auction sales. This is a fundamental difference from private treaty sales, where buyers typically have 2–5 business days to withdraw. Signing the auction contract means you are legally committed — ensure you are ready before bidding.
Deposit and settlement
The successful bidder signs the contract and pays the deposit — usually 10% — on the day of the auction. Some agents accept a smaller holding deposit with the balance due within a few days. Settlement (transfer of title and payment of the balance) typically occurs 30–90 days later, as specified in the contract.
Buying under a different name
The name recorded on the auction contract is the legal purchaser. If you want to purchase in a company name, trust name, or another individual’s name, inform the agent before the auction so the correct details are documented. Changing the name after the contract is signed is complex and may attract additional stamp duty.