Property auctions in Australia — particularly in Melbourne and Sydney — are one of the most common ways residential property is sold. Understanding how the auction process works gives you a significant competitive advantage as a buyer, and helps sellers maximise their result.
Step 1: The Campaign Period (3-4 Weeks)
The vendor’s agent runs open inspections over 3-4 weeks. During this time you should complete all due diligence — building inspection, pest inspection, legal review of the Section 32 (in Victoria) or Contract of Sale, strata report (for apartments), and finance pre-approval.
Step 2: Pre-Auction Offers
Many buyers make pre-auction offers to try to buy before auction day. A Collings Property Advisor can advise whether a pre-auction offer is the right strategy and at what price.
Step 3: Auction Day Registration
In most Australian states, you must register to bid on auction day with photo ID and, in some states, proof of deposit funds.
Step 4: The Auction Opens
The auctioneer opens the auction, often with a vendor bid to start proceedings. Registered bidders then compete by calling out bids or nodding to the auctioneer.
Step 5: On the Market
When bidding reaches or exceeds the vendor’s reserve price, the auctioneer declares the property “on the market” — meaning it will sell to the highest bidder.
Step 6: Hammer Fall
When the auctioneer’s hammer falls, the highest bidder has unconditionally purchased the property. Contracts are signed immediately and a 10% deposit is payable on the day.
Step 7: What If the Property Passes In?
If bidding does not reach the reserve price, the property “passes in.” The highest bidder has the first right to negotiate privately with the vendor — often where the best buying opportunities exist.
Auction vs Private Sale
| Feature | Auction | Private Sale |
|---|---|---|
| Cooling off period | No cooling off period | 3 days in Victoria |
| Finance clause | No finance clause — unconditional purchase | Finance clause can be included |
| Deposit | 10% on the day | Negotiable, typically 10% |
| Building inspection | Must be done before auction | Can be a condition of sale |
Frequently Asked Questions
Do I have to pay a deposit if I win at auction?
Yes — a 10% deposit is payable immediately when the hammer falls. You need this arranged in advance of auction day.
Can I use a finance clause at auction?
No. Auction purchases are unconditional. You must have unconditional finance pre-approval before bidding at auction.
What happens if the property passes in?
The highest registered bidder has the first right to negotiate with the vendor privately after the auction. This is often a strong buying position.
Why Collings Property Advisory?
Collings Property Advisory prepares buyers for auction with comparable sales analysis, reserve price estimates, bidding strategy and contract review — all included in our flat $4,500 + GST buyer advisory fee.
Buyer Advisory: $4,500 + GST
Get auction preparation support from a Collings Property Advisor
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