Buying at auction is one of the most common ways to purchase property in Melbourne and Sydney — where auction clearance rates regularly exceed 70%. But auctions can be intimidating if you do not know the rules. This guide covers everything you need to do before, during and after an auction to give yourself the best chance of buying at the right price.

Before the Auction — Your Preparation Checklist

Before bidding at any auction you should: (1) get unconditional finance pre-approval — there is no cooling-off period at auction; (2) have your conveyancer review the contract of sale and Section 32 before auction day; (3) get a building and pest inspection done; (4) research recent comparable sales in the street and suburb; (5) set a maximum bid — your walk-away number — and commit to it; (6) register to bid (required in Victoria, Queensland and some other states); (7) inspect the property at least twice including one final inspection before auction day.

On Auction Day — How to Bid Strategically

Arrive early. Register your bidder number. Observe the auctioneer’s style and the crowd — how many registered bidders are there? Bid confidently and decisively rather than timidly. Opening with a strong bid can discourage competition. Avoid bidding in round numbers — a bid of $851,000 instead of $850,000 signals you have more to spend and can unsettle other bidders. Know when to stop — your pre-set maximum is your anchor. If the property passes in (does not reach reserve), you have the right to negotiate with the vendor immediately as the highest bidder.

After the Auction — What Happens Next

If you win, you sign the contract immediately and pay the deposit (typically 10%) on the day. There is no cooling-off period. Settlement occurs on the agreed date in the contract — typically 30-90 days. Your conveyancer will manage the settlement process from this point.

Common Auction Mistakes to Avoid

The most common buyer mistakes at auction include: not having unconditional finance ready, failing to read the contract before auction day, bidding beyond your limit in the heat of the moment, not attending multiple auctions to observe before bidding at your first, and underestimating the vendor’s reserve relative to comparable sales.

Frequently Asked Questions

What happens if a property passes in at auction?

If the property does not reach the vendor’s reserve price, it is passed in. The highest bidder has first right to negotiate with the vendor immediately after the auction. If those negotiations fail, the property goes back to market.

Can I use a buyers advocate to bid at auction for me?

Yes — and many experienced investors do exactly this. A buyers advocate can register and bid on your behalf, bringing experience, discipline and emotional detachment to the process. Collings works with buyers advocates across Melbourne and Sydney.

Is there a cooling-off period after winning at auction?

No. Once the hammer falls at auction, the contract is unconditional and legally binding. There is no cooling-off period. This is why unconditional finance pre-approval and a pre-auction contract review are essential.

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