Reference Guide — 2026

Auction Rules Quick Reference

Comprehensive guide to real estate auction rules across Australia. Covering bidder registration, vendor bidding, cooling-off periods, and state-by-state comparisons for NSW, VIC, QLD, WA, and SA.

Before the Auction

Vendor's Reserve Price & Instructions

The vendor sets a reserve price — the minimum price they will accept. The auctioneer must receive clear instructions from the vendor before the auction regarding the reserve price, whether vendor bids will be used, and any conditions of sale. The reserve price is confidential and is not disclosed to bidders.

Contract Preparation & Availability

The contract of sale must be prepared and available for inspection before the auction. In NSW, the contract must be available for inspection at least 3 business days before auction day. In Victoria, the vendor statement (Section 32) and contract must also be available 3 business days prior. Buyers should arrange legal review before bidding.

Bidder Registration Requirements

In NSW and Victoria, bidder registration is mandatory. Bidders must register before the auction commences, present valid photo identification (e.g., driver's licence, passport), and receive a unique bidder number. Only registered bidders can make bids. In other states, registration practices vary.

Cooling-Off Period Waiver

Properties sold at auction have NO cooling-off period in any Australian state. The contract is unconditionally binding upon the fall of the hammer. This is one of the most commonly tested points in real estate exams. Buyers must complete all inspections, finance approval, and legal checks before auction day.

During the Auction

Auctioneer Conduct Rules

The auctioneer must conduct the auction fairly and transparently. They must announce the terms of sale, explain the bidding process, and ensure all bids are genuine. The auctioneer has the right to refuse any bid, set minimum bid increments, and withdraw the property from sale.

Vendor Bidding Rules

In NSW: maximum 1 vendor bid, must be declared
In VIC: maximum 1 vendor bid, must be announced
In QLD: vendor bids permitted, must be declared
In WA: vendor bidding is not permitted
In SA: maximum 1 vendor bid, must be declared

Dummy Bidding — ILLEGAL

Dummy bidding (also called phantom bidding or shill bidding) is when a person bids at auction without any genuine intention of buying, solely to inflate the price. This practice is illegal in all Australian states.

Penalties include fines up to $22,000 for individuals and $110,000 for corporations (NSW), plus potential licence cancellation and criminal charges.

“On the Market” vs “Not Yet on the Market”

When bidding reaches or exceeds the reserve price, the auctioneer declares the property “on the market” — meaning it will be sold to the highest bidder. Before the reserve is met, the property is “not yet on the market” and may be passed in if no bids meet the reserve. The announcement of “on the market” is a critical moment that signals to bidders the property will definitely sell that day.

After the Auction

Successful Bidder

Contract is binding immediately — no cooling-off
Deposit of usually 10% payable on the day
Contract exchange occurs immediately after the auction
Settlement as per contract terms (typically 42-90 days)

Passed In

Property did not reach the reserve price
Highest bidder gets first right to negotiate
Agent facilitates private negotiation with vendor
If no deal, property listed for private sale

Contract Exchange

Contracts signed immediately after successful auction
Deposit paid (cheque, bank cheque, or EFT)
Agent issues receipt for trust account
Both parties receive signed copies of contract

State-by-State Comparison

Rule	NSW	VIC	QLD	WA	SA
Bidder registration required?	Yes (mandatory)	Yes (mandatory)	Recommended	Varies	Recommended
Vendor bids allowed?	Yes	Yes	Yes	No	Yes
Max vendor bids	1	1	Must declare	N/A	1
Cooling-off at auction?	No	No	No	No	No
Deposit typically	10%	10%	10%	10%	10%
Contract available before auction	3 business days	3 business days (Section 32)	Before auction	Before auction	Before auction

Common Exam Questions

These scenarios are frequently tested in the Certificate IV in Real Estate Practice assessments. Practice applying auction rules to real-world situations.

A buyer signs a contract at auction on Saturday. On Monday, they want to exercise the cooling-off period. Can they?

Answer: No. There is no cooling-off period for properties sold at auction. The contract became binding when the hammer fell on Saturday.

During an auction in NSW, the auctioneer makes two bids on behalf of the vendor without declaring them. Is this lawful?

Answer: No. In NSW, only one vendor bid is permitted, and it must be clearly announced as a vendor bid. Making undeclared vendor bids is a breach of the Property and Stock Agents Act.

A friend agrees to bid at auction to push up the price for the vendor, with no intention of buying. What offence is this?

Answer: This is dummy bidding, which is illegal in all Australian states. Penalties include substantial fines and potential criminal prosecution.

A prospective bidder arrives at auction without photo ID. The agent asks them to register. Can they bid without ID?

Answer: In NSW and Victoria, no. Bidder registration with valid photo identification is mandatory. The bidder must register and receive a bidder number before they can participate.

The property is passed in at auction. The second-highest bidder approaches the agent wanting to negotiate. Who gets first right?

Answer: The highest bidder at the time of passing in has the first right to negotiate with the vendor. The second-highest bidder must wait until the highest bidder's negotiation concludes.

An agent in Victoria fails to make the contract available for inspection 3 business days before auction. What are the consequences?

Answer: This is a breach of the Sale of Land Act 1962 (Vic). The vendor statement (Section 32) and contract must be available for inspection at least 3 business days before auction. Failure can result in the buyer having the right to rescind the contract.

Frequently Asked Questions

Is there a cooling-off period for properties bought at auction in Australia?

No. Properties sold at auction do not have a cooling-off period in any Australian state. The contract is binding immediately upon the fall of the hammer. This also applies to properties sold by private treaty within 3 business days before or after a scheduled auction in some states (e.g., NSW). Buyers should complete all due diligence before auction day.

What is a vendor bid and how many are allowed?

A vendor bid is a bid made by the auctioneer on behalf of the seller to encourage bidding. In NSW, Victoria, and SA, a maximum of one vendor bid is permitted and it must be clearly declared as a vendor bid. In Queensland, vendor bids are also permitted but must be announced. In Western Australia, vendor bidding is not permitted at auction.

What happens if a property is passed in at auction?

If a property fails to reach the reserve price and is "passed in," the highest bidder typically has the first right to negotiate with the vendor. The agent will usually invite the highest bidder into a private negotiation immediately after the auction. If no agreement is reached, the property may be listed for private sale.

Do I need to register before bidding at auction?

In NSW and Victoria, bidder registration is mandatory. You must register before the auction, provide identification (photo ID), and receive a bidder number. In Queensland, WA, and SA, registration requirements vary but most auctions require some form of identification. Always check local requirements before attending.

What deposit is typically required at auction?

The deposit at auction is typically 10% of the purchase price, payable on the day by cheque, bank cheque, or electronic transfer. However, the deposit amount can be negotiated with the vendor before auction (it may be less than 10%). The deposit is held in the agent's trust account until settlement.

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