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
Disclosure rules differ by state. In NSW, the contract must be available for inspection whenever the property is advertised for sale, including before an auction. In Victoria, the Section 32 vendor statement must be given before the buyer signs. In Queensland, the Form 2 seller disclosure statement must be given or made available before the fall of the hammer. In SA, the Form 1 vendor's statement must be available for at least 3 consecutive business days before the auction and at the auction. Buyers should arrange legal review before bidding.
Bidder Registration Requirements
In NSW, Queensland and SA, bidder registration is mandatory: bidders must register before bidding and show identification (in NSW, an Australian photo driver's licence, an Australian passport or other ID allowed by the regulation), and the auctioneer cannot take a bid from an unregistered person. Victoria and WA have no statutory registration requirement.
Cooling-Off Period Waiver
The statutory cooling-off period does not apply to auction sales in NSW, Victoria, Queensland or SA, and WA has no statutory cooling-off period. Some sales just before or after an auction are excluded too (e.g., Victoria: within 3 clear business days before or after a publicly advertised auction). 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, by the auctioneer, announced
- In VIC: no set limit; auctioneer only, each announced
- In QLD: only if the conditions of sale allow; disclosed, not above reserve
- In WA: only if notified in the conditions of sale, up to the number stated
- In SA: up to 3 vendor bids (residential), by the auctioneer, announced, below reserve
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. It is an offence in NSW, Victoria and SA, and the Queensland Government describes false bids as illegal.
NSW maximum penalty: $55,000 for individuals and $110,000 for corporations. SA: up to $20,000. Agents may also face disciplinary action.
“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 — no statutory cooling-off
- Deposit as set by the contract (10% is common), usually payable on the day
- Contract exchange occurs immediately after the auction
- Settlement as per contract terms
Passed In
- Property did not reach the reserve price
- Highest bidder usually negotiates first (a prescribed rule in VIC; practice elsewhere)
- 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 (with ID) | Not required by law | Yes (with ID) | Not required by law | Yes (with ID) |
| Vendor bids allowed? | Yes (auctioneer only) | Yes (auctioneer only) | If conditions of sale allow | If conditions of sale allow | Yes (auctioneer only) |
| Max vendor bids | 1 | No set limit | No set limit; not above reserve | Number stated in conditions of sale | 3 (residential); below reserve |
| Cooling-off at auction? | No | No | No | No (no statutory cooling-off) | No |
| Deposit | Set by contract (10% common) | Set by contract (10% common) | Set by contract (10% common) | Set by contract (10% common) | Set by contract (10% common) |
| Disclosure before auction | Contract available while advertised | Section 32 before buyer signs | Form 2 before fall of hammer | No statutory period | Form 1: 3 business days before + at auction |
Common Exam Questions
These scenarios cover auction rules that come up 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. The statutory cooling-off period does not apply to a sale at auction in any of the five states (and WA has no statutory cooling-off period at all).
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 the auctioneer may make only one vendor bid, and it must be announced as a vendor bid. This breaches the Property and Stock Agents Act 2002 and the Property and Stock Agents Regulation 2022.
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. It is an offence in NSW (up to $55,000 for an individual and $110,000 for a corporation), Victoria and SA, and the Queensland Government describes false bids as illegal. WA's Auction Sales Act instead penalises bids for the seller that were not notified in the conditions of sale.
A prospective bidder arrives at a Sydney auction without ID. Can they bid without registering?
Answer: No. In NSW (and in Queensland and SA) the auctioneer must not take a bid from a person who is not registered, and registration requires identification.
A Victorian property is passed in below the reserve. The second-highest bidder approaches the agent wanting to negotiate. Who gets first right?
Answer: Under Victoria's prescribed auction rules the vendor first negotiates with the highest bidder. In the other states this is common practice rather than a legal requirement.
An SA agent puts the Form 1 vendor's statement on display only on auction day. Is that enough?
Answer: No. In SA the Form 1 must be available at the agent's or auctioneer's office for at least 3 consecutive business days before the auction and at the auction site for at least 30 minutes before it starts.
Frequently Asked Questions
Is there a cooling-off period for properties bought at auction in Australia?
What is a vendor bid and how many are allowed?
What happens if a property is passed in at auction?
Do I need to register before bidding at auction?
What deposit is typically required at auction?
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