Buying at Auction in Australia: A Practical Bidder's Guide

The Unconditional Contract

The most important fact about buying at auction in Australia: if you are the successful bidder, you have entered an unconditional contract to purchase the property. There is no cooling-off period, no finance condition, no pest-and-building condition. You must exchange contracts and pay your deposit (typically 10%) immediately after the fall of the hammer.

Pre-Auction Preparation

• 1 Review the contract of sale with your conveyancer before auction
• 2 Conduct a building and pest inspection ($400-700) — results cannot be negotiated post-auction
• 3 Get unconditional finance approval from your lender — not just pre-approval, which has conditions
• 4 Research comparable sales (not just agent-quoted estimates)
• 5 Attend several auctions in the area to understand the auctioneer's style and tempo
• 6 Set your absolute limit in writing before the auction — emotion causes people to overpay

Bidding Strategy

• 1 Bid early and with confidence — hesitant bidding encourages others
• 2 Bid in large increments to signal conviction — small increments can slow proceedings but also signal you're at your limit
• 3 Don't show your limit by hesitating at a specific number
• 4 If the property is passed in (doesn't reach reserve), you are immediately entitled to first negotiation with the agent if you were the highest bidder

Passed In at Auction

If a property is passed in (bidding doesn't reach the vendor's reserve price), the auction ends and the property moves to private negotiation. The highest bidder at auction traditionally gets first right of negotiation with the selling agent. Many properties that pass in sell within 48 hours through private treaty — often at or below the reserve.

Vendor Bidding

Auctioneers are legally required to disclose vendor bids (bids placed on behalf of the seller to keep the bidding moving to reserve). In NSW, VIC, and QLD, vendor bids must be announced as such. Once the reserve is reached (bidding has met the seller's minimum), all bids must be genuine buyer bids — no more vendor bids permitted.