Guide · Buying

Buying at auction in Australia: the rules by state

How an auction works in Australia: bidder registration, vendor bids, reserve, deposit and no cooling-off, with the rules of NSW, VIC, QLD, WA, SA, TAS and ACT.

Checked on against the official sources at the bottom of the page.

In short

At an Australian auction, the highest bidder at or above the seller’s reserve buys the property, there is no cooling-off period, and you generally cannot make your bid subject to finance or an inspection. You usually sign the contract and pay a deposit of about 10% on the day. Registration, vendor bids and the paperwork are set by each state, so check the rule of the state where the property is. This guide covers NSW, VIC, QLD, WA, SA, TAS and the ACT.

Before the day

  • Read the contract and disclosure documents first. By bidding you accept the contract on display (Victoria). Have a conveyancer or solicitor read it before auction day.
  • Do inspections and arrange finance beforehand. Conditions such as “subject to finance” are generally not allowed in Queensland, Western Australia and Victoria.
  • Check the conditions of sale. They must be displayed before the auction, and the auctioneer announces additional conditions (nsw.gov.au, Consumer Affairs Victoria).
  • In South Australia, the Form 1 must be available at the agent’s or auctioneer’s office for 3 business days before the auction and at the venue for at least 30 minutes beforehand (SA Law Handbook).

Registration and bidder numbers

StateRule
NSWGive the selling agent your name and address and proof of identity; you receive a bidder’s number to display when you bid. Registering gives you the right to bid, not the duty.
VICThe auctioneer must say that bidders will be identified on request. The page read describes no separate registration process.
QLDOnly registered bidders can bid. The auctioneer gives you a unique identifier such as a numbered paddle.
WAThe page read does not cover bidder registration. Ask the agent.
SABidders must be registered; each has a unique identifier, and each bid is announced aloud using it. Non-compliance has a penalty of up to $10,000.
TASThe successful bidder must give the auctioneer their name and address, or those of the person they bid for.
ACTThe seller’s agent keeps a bidders record (name, address, proof of identity sighted, bidder number) and must keep it for 3 years. The auctioneer may only take bids from people displaying their bidder number.

Vendor bids and dummy bids

A vendor bid is a bid the auctioneer makes for the seller. A dummy bid (or false bid) is a bid by someone who is not a genuine buyer, to push the price up. Dummy bidding is illegal.

  • NSW: the auctioneer may make one bid for the seller and must announce it. Court penalties for dummy bidding are up to $55,000 for individuals and $110,000 for corporations.
  • VIC: vendor bids are allowed only if they are in the auction rules displayed beforehand and announced at the start. Co-owners can bid from the crowd but not through the auctioneer.
  • QLD: the auctioneer can accept vendor bids only up to the reserve price; once the reserve is reached, further vendor bids are illegal false bids. Each must be announced.
  • WA: the seller or agent can bid up to the reserve; the intended number of bids must be shown in the conditions of sale.
  • SA: up to three vendor bids if the conditions allow, the auctioneer announces them beforehand and just before each bid, and each is below the reserve. The maximum penalty for dummy bidding is $20,000.
  • TAS: the owner cannot bid or cause anyone to bid. The auctioneer may bid for the owner only if the auction conditions permit it, after declaring this orally before bidding starts, and must say each bid is for the owner.
  • ACT: the seller cannot bid or arrange a bid. The auctioneer may make one bid for the seller if the conditions permit it, after an oral declaration before bidding begins.
  • NT: the NT Government pages could not be read for this guide. Ask the NT Government or a conveyancer.

The reserve price

The reserve is the minimum the seller will accept. It is generally not disclosed: in Queensland the auctioneer may say whether a reserve is set but must not state the amount. If bidding does not reach it, the property may be passed in or withdrawn, and the highest bidder generally has the first chance to negotiate with the seller (nsw.gov.au, Consumer Affairs Victoria). In Queensland, once the reserve is reached the auction must result in a sale.

Deposit and no cooling-off

  • Deposit: there is no legal minimum in Victoria, but it is usually 10%. In NSW you sign and pay the deposit on the spot, usually 10%. In WA the deposit is about 10% at the close of the auction, with settlement usually 30 days later. Ask the agent how you can pay it.
  • Cooling-off: none for auctions in NSW, VIC, QLD, SA and the ACT (see cooling-off period). A contract made soon after a passed-in auction can also have none; the window differs by state.

After you win

You sign the contract and pay the deposit; the balance is paid at settlement. See settlement and electronic conveyancing. Purchase duty is a state tax: try the stamp duty calculator. If you are a foreign person, federal approval is required before you bid: see foreign buyers and FIRB.

What it costs

The deposit is a share of the price: about 10% × price in the states above. It is part of the price, not an extra. Your own costs are inspections, a conveyancer or solicitor, and purchase duty.

Which professional to consult

A conveyancer or solicitor should read the contract before auction day and can tell you what can be changed; see conveyancer. A building inspector can report on the property beforehand; see building inspector.

Frequently asked questions

Can I bid on someone else’s behalf?

Registration records whether you bid for yourself or for someone else (ACT) and the winning bidder gives the name of the person they bid for (Tasmania). Ask the agent what authority document they require.

Can I bid subject to finance?

Generally no. The Victorian, Queensland and Western Australian pages say you cannot add conditions such as finance unless the seller agrees. Ask your conveyancer about the state where the property is.

What does “passed in” mean?

The bidding did not reach the reserve and the property was not sold at auction. The highest bidder usually gets the first right to negotiate.

What if I think a bid was not genuine?

Dummy bidding is illegal. Tell the state’s fair trading or consumer authority.

Is the Form 1 or section 32 available before an auction?

Yes. In Victoria the section 32 statement must be given before you sign; in South Australia the Form 1 is available at the agent’s office before the auction.

More guides on buying

Sources

All guides · Payotte Australia