Things to Keep in Mind if You Are Buying Property in an Auction
Buying property at auction can be exciting, but it’s also high-pressure and legally binding. Unlike private sales, auctions come with stricter rules and no cooling-off period, which means once you win, you’re locked in. Here’s everything you must know and prepare for.
Things to Keep in Mind if You Are Buying Property in an Auction
Buying property at auction can be exciting, but it’s also high-pressure and legally binding. Unlike private sales, auctions come with stricter rules and no cooling-off period, which means once you win, you’re locked in. Here’s everything you must know and prepare for.
Your Essential Auction Buyer Checklist
Why Do Lenders Require Valuations?
1. No Cooling-Off Period
At auction, you do not get a cooling-off period.
Once you win the bid, you are legally bound — even if you haven’t signed the contract yet.
That means you can’t walk away if your finance falls through or inspections reveal issues.
2. Get Loan Pre-Approval First
Always have loan pre-approval in place before bidding.
Pre-approval helps you set a maximum bid limit and gives confidence when bidding.
Overbidding can be dangerous if your lender won’t approve the loan amount.
3. Understand the Auction Process
Announcement – Property is marketed with an auction date, time, and venue (price guides
may or may not be provided, depending on state laws).
Inspections – Buyers view the property during scheduled open homes.
Buyer Engagement – Agents may encourage pre-auction offers and gather intel on your
budget.
Reserve Price – Seller sets a minimum price they’re willing to accept before the auction starts.
Auction Day – Bidding takes place. If bids meet or exceed the reserve, the highest bidder wins.
If not, the property may be “passed in” for later negotiation.
Contracts Signed Immediately – The winning bidder signs the contract on the spot and pays the
deposit.
4. Contract of Sale Must Be Reviewed
Have a conveyancer or solicitor review the contract well before the auction.
You cannot amend or negotiate terms once bidding starts.
Any changes (settlement period, deposit amount, inclusions) must be agreed on before you
register to bid.
5. Do All Inspections Early
Since you can’t back out after winning, do your due diligence beforehand:
Building inspection – check for structural issues.
Pest inspection – uncover hidden infestations.
Valuation – ensure the property meets your lender’s requirements.
6. Confirm the Property is Lender-Approved
Not all properties are accepted by all lenders.
Some lenders avoid specific apartments, titles, or locations.
Confirm with your mortgage broker that the property is acceptable before bidding.
7. Be Auction-Ready
Once you register and bid, you’re legally bound if you win.
Even without your signature, the winning bid is enforceable.
Bring your deposit and documents, and be confident in your inspections, finances, and contract.
8. Professionals You Need on Your Side
Mortgage broker – confirm borrowing power and lender acceptance.
Conveyancer/Solicitor – review the contract and flag risks.
Building & Pest Inspectors – safeguard against hidden problems.
Optional: Buyer’s agent or accountant – for bidding strategy and tax planning.
Final Thought
Buying at auction requires thorough preparation. Unlike private treaty sales, there’s no cooling-off
period or second chance. Before you bid:
Get loan pre-approval.
Review the contract of sale.
Complete inspections early.
Confirm lender acceptance.
By preparing early and working with trusted professionals, you can bid confidently and avoid costly
mistakes.
Your Essential Auction Buyer Checklist
Why Do Lenders Require Valuations?
1. No Cooling-Off Period
At auction, you do not get a cooling-off period.
Once you win the bid, you are legally bound — even if you haven’t signed the contract yet.
That means you can’t walk away if your finance falls through or inspections reveal issues.
2. Get Loan Pre-Approval First
Always have loan pre-approval in place before bidding.
Pre-approval helps you set a maximum bid limit and gives confidence when bidding.
Overbidding can be dangerous if your lender won’t approve the loan amount.
3. Understand the Auction Process
Announcement – Property is marketed with an auction date, time, and venue (price guides
may or may not be provided, depending on state laws).
Inspections – Buyers view the property during scheduled open homes.
Buyer Engagement – Agents may encourage pre-auction offers and gather intel on your
budget.
Reserve Price – Seller sets a minimum price they’re willing to accept before the auction starts.
Auction Day – Bidding takes place. If bids meet or exceed the reserve, the highest bidder wins.
If not, the property may be “passed in” for later negotiation.
Contracts Signed Immediately – The winning bidder signs the contract on the spot and pays the
deposit.
4. Contract of Sale Must Be Reviewed
Have a conveyancer or solicitor review the contract well before the auction.
You cannot amend or negotiate terms once bidding starts.
Any changes (settlement period, deposit amount, inclusions) must be agreed on before you
register to bid.
5. Do All Inspections Early
Since you can’t back out after winning, do your due diligence beforehand:
Building inspection – check for structural issues.
Pest inspection – uncover hidden infestations.
Valuation – ensure the property meets your lender’s requirements.
6. Confirm the Property is Lender-Approved
Not all properties are accepted by all lenders.
Some lenders avoid specific apartments, titles, or locations.
Confirm with your mortgage broker that the property is acceptable before bidding.
7. Be Auction-Ready
Once you register and bid, you’re legally bound if you win.
Even without your signature, the winning bid is enforceable.
Bring your deposit and documents, and be confident in your inspections, finances, and contract.
7. Be Auction-Ready
Mortgage broker – confirm borrowing power and lender acceptance.
Conveyancer/Solicitor – review the contract and flag risks.
Building & Pest Inspectors – safeguard against hidden problems.
Optional: Buyer’s agent or accountant – for bidding strategy and tax planning.
Final Thought
Buying at auction requires thorough preparation. Unlike private treaty sales, there’s no cooling-off period or second chance. Before you bid:
Get loan pre-approval.
Review the contract of sale.
Complete inspections early.
Confirm lender acceptance.
By preparing early and working with trusted professionals, you can bid confidently and avoid costly
mistakes.
Related Topics
Buying your first home? Follow these must-do steps to stay prepared, avoid mistakes, and purchase with confidence.
Key experts—like brokers, solicitors, and inspectors—who guide and support you through every step of buying your first home.
A split loan lets you divide your mortgage into two parts—one fixed, one variable—so you can balance stability with flexibility.
Lenders may discount parts of your income—like bonuses or casual earnings—when assessing your borrowing power. This is known as “income shredding” or an “income haircut.”
The cooling-off period is a brief timeframe after signing a property contract when buyers can cancel the deal, often with little or no penalty.
Discover the five key factors lenders evaluate when assessing loan applications and learn how each plays a role in securing mortgage approval.
Related Topics
Buying your first home? Follow these must-do steps to stay prepared, avoid mistakes, and purchase with confidence.
Key experts—like brokers, solicitors, and inspectors—who guide and support you through every step of buying your first home.
A split loan lets you divide your mortgage into two parts—one fixed, one variable—so you can balance stability with flexibility.
Lenders may discount parts of your income—like bonuses or casual earnings—when assessing your borrowing power. This is known as “income shredding” or an “income haircut.”
The cooling-off period is a brief timeframe after signing a property contract when buyers can cancel the deal, often with little or no penalty.
Discover the five key factors lenders evaluate when assessing loan applications and learn how each plays a role in securing mortgage approval.
FOLLOW US
© 2025 Estate Seeker.com.au - All Rights Reserved. Content on this site is for educational purposes only.
Always consult with a professional before making any investment decisions.