Frequently Asked Questions About Buying at Auction

Can I bid by telephone or online?

In many cases, yes. Telephone bidding is an option with all agencies; online bidding is not often provided. Phone bidding arrangements must be made with the real estate agent prior to auction day, and you must complete a telephone registration form. Registration requirements and photo ID may apply, so it’s important to discuss your preferred bidding method well in advance of the auction with the agent you are working with.

Can I make an offer prior to the advertised auction date?

Yes. You can make an offer prior to the scheduled auction date. If the vendor chooses to accept the offer, the auction is likely brought forward and the property sold. In many cases, interested buyers will be notified and given the opportunity to participate if interested. Should no other interest form, the hammer may drop in your favour on the price you submitted.

How much deposit do I need to pay if I am successful at auction?

The deposit is typically 10% of the purchase price and is payable immediately following the auction. However, in some circumstances, alternative deposit arrangements can be negotiated with the vendor before auction day. Any agreed variation must be documented prior to bidding.

What is a Side Agreement or Variation to Auction Terms Agreement?

A Side Agreement (also known as a Variation to Auction Terms Agreement) is a written agreement between the buyer and seller that changes one or more of the standard auction conditions. This may include an amended deposit amount, settlement date, or other agreed terms. Any variations must be approved by the vendor and signed before the auction begins.

What is a Vendor Bid?

A Vendor Bid is a bid made by the auctioneer on behalf of the seller. Vendor bids are used to help establish bidding momentum and indicate that the property’s reserve price has not yet been reached. The auctioneer must clearly identify any vendor bid when it is made, they are always below the reserve so buyers and bidders should feel confident to bid over the vendor bid.

What happens if the property does not meet the reserve price?

If bidding does not reach the vendor’s reserve price, the property is “passed in.” This means it has not sold under the hammer. The auction is often the only opportunity to compete in a completely transparent environment. If the property is passed in, conditional buyers may enter the process and negotiations become private, meaning you may lose the visibility and negotiating advantages that the auction provides.

If I am the only bidder, why should I bid? What does it mean if the auctioneer comes to speak with me during the auction?

If you are the only bidder, you may be in a very strong negotiating position. Making an opening bid demonstrates genuine interest, places you in the box seat as the highest bidder with the first right to negotiate with the seller.

If the auctioneer pauses proceedings and comes to speak with you, they are usually seeking feedback, discussing the current bidding level, or obtaining instructions from the vendor. In some cases, they may be trying to determine whether a sale can be achieved between the two parties. You may have the opportunity to increase your bid to secure the property. This is a normal part of the auction process and does not mean you are obligated to increase your bid.