Understanding Auctions
Auctions are a common way to sell property in Sydney, particularly in competitive markets. Unlike private treaty sales, auctions have no cooling-off period – if you're the winning bidder, you're legally bound to purchase.
This makes preparation absolutely critical. Everything must be in order BEFORE auction day.
Before Auction Day
Complete these tasks in the days and weeks before auction:
Pro Tips
- Attend other auctions first to understand the process
- Talk to the selling agent about vendor expectations
- If unsure about any aspect, seek professional advice
What to Bring on Auction Day
Don't leave anything to chance. Bring these essentials:
Pro Tips
- Arrive 15-30 minutes early to register and settle in
- Bring a support person – they can help you stay calm and focused
- Dress comfortably but respectfully
Bidding Registration
Before you can bid, you must register with the auction agent:
Complete registration form with your details
Provide photo ID for verification
Receive your bidder number/paddle
If bidding on behalf of someone else, you'll need written authorisation
Official Resources
Bidding Strategies
There's no single "right" way to bid, but these strategies can help:
Opening Bid Strategy: Some prefer to open bidding to show confidence. Others wait to assess competition.
Round Number vs. Odd Bids: Bidding in odd amounts ($1,003,500 instead of $1,000,000) can disrupt competitor psychology.
Quick vs. Slow Bidding: Quick bids can create momentum and intimidate. Slow, deliberate bids show you're calculated.
Know Your Limit: Decide your maximum BEFORE the auction and STICK TO IT. Auction fever is real.
Pro Tips
- Make eye contact with the auctioneer when bidding
- Bid with confidence – don't appear hesitant
- If you're the underbidder, don't despair – the deal can still fall through
Understanding the Auction Process
Before bidding starts:
Auctioneer introduces the property and terms
Vendor reserve price is confidential
Opening call for bids
During bidding:
Bids must be clear and unambiguous
Auctioneer may place vendor bids (must declare)
Bidding continues until no more bids received
At the fall of the hammer:
If property reaches reserve, highest bidder wins
If "passed in" (didn't reach reserve), highest bidder gets first negotiation rights
Winning bidder signs contract immediately
If You Win
Congratulations! Here's what happens immediately:
Sign the contract of sale on the spot
Pay the deposit (usually 10%)
Exchange contracts – you're now legally committed
No cooling-off period applies to auction purchases
In the following days:
Your solicitor finalises contract details
Organise building insurance (your risk from exchange)
Your lender processes final loan approval
Settlement typically occurs in 42 days
If the Property Passes In
If bidding doesn't reach the vendor's reserve price, the property is "passed in."
Highest bidder opportunity:
You get first right to negotiate privately
Discussion usually happens immediately in a private room
This is your chance to negotiate between your last bid and the reserve
If you weren't the highest bidder:
You can still express interest to the agent
If negotiations with the highest bidder fail, you may be contacted
Official Resources
Frequently Asked Questions
Is there a cooling-off period for auctions?
How much deposit do I need at auction?
Can I bid on behalf of someone else?
What if I can't complete the purchase after winning?
Disclaimer
This checklist provides general guidance for NSW property auctions. Rules may vary in other states. Always seek legal advice regarding contracts and ensure finance is unconditionally approved before bidding. The auctioneer's announcements on the day take precedence over any general information.
