Auctions are high-stakes events. In Victoria, once the hammer falls, you are locked into a binding contract with no cooling-off period, no subject-to-finance clause, and no way out. Under Section 31 of the Sale of Land Act 1962, the three business day cooling-off period that applies to private sales is explicitly excluded for properties sold at auction.
That means every piece of preparation matters. Here are fifteen tips drawn from experienced auction buyers and conveyancing professionals across Melbourne and regional Victoria.
Before auction day
1. Get the Section 32 and contract reviewed early
This is the single most important step. Because there is no cooling-off period at auction, you cannot walk away after signing if you discover a problem. Have your solicitor or conveyancer review the Section 32 Vendor's Statement and the Contract of Sale at least five to seven days before auction day. A typical solicitor review costs $200 to $500 and can save you tens of thousands.
2. Arrange finance pre-approval
Because you cannot include a subject-to-finance clause at auction, you need to know exactly how much you can borrow before you bid. Get formal pre-approval from your lender — not just an indicative figure. Keep in mind that pre-approval typically lasts 90 days and may have conditions attached.
3. Set a hard bidding limit
Decide your maximum price before you arrive and write it down. Factor in stamp duty ($27,000 to $33,000 on a $650,000 property), legal fees ($1,500 to $3,000), building inspections ($400 to $700), and any immediate repairs the property needs. Your bidding limit should be the purchase price, not your total budget.
4. Attend other auctions first
If you have never bid at an auction, attend two or three in your target area as a spectator. Watch how bidders behave, how the auctioneer manages the crowd, and how vendor bids work. This experience is invaluable and costs nothing.
5. Arrange your deposit
Most auction contracts require a 10% deposit on the day. On a $750,000 property, that is $75,000. Check with the agent whether they accept a personal cheque, bank cheque, or electronic transfer. Some agents accept a smaller deposit by arrangement, but do not assume this — confirm in writing beforehand.
6. Get a building and pest inspection done before auction
You cannot make your purchase subject to a building inspection at auction. If you want to know what you are buying, pay for the inspection before the auction. Budget $400 to $700 for a combined building and pest report. Yes, you lose this money if you do not win — but it is far cheaper than discovering $50,000 in structural defects after you have signed.
On auction day
7. Register early
Arrive at least 20 minutes before the auction starts. You must register with the agent and provide identification before you can bid. You will receive a bidder number or card.
8. Open with a strong bid
A strong opening bid signals confidence and can discourage weaker bidders. If the quoted range is $600,000 to $660,000, opening at $600,000 or $610,000 is more effective than starting at $500,000.
9. Bid in odd numbers
When the bidding slows, bid in odd increments. Instead of raising from $740,000 to $750,000, bid $741,000 or $743,000. This breaks the rhythm, makes the gap to the next round number feel larger for other bidders, and can psychologically discourage competitors.
10. Control your body language
Do not show excitement, frustration, or hesitation. Bid clearly and calmly. If you need a moment, take it — there is no time limit. The auctioneer will wait.
11. Watch for vendor bids
Under the Estate Agents Act 1980, the vendor (or auctioneer on the vendor's behalf) is legally permitted to make bids up to the reserve price. These must be announced as vendor bids. Dummy bidding — bids by people who have no intention of buying, placed to inflate the price — is illegal and carries penalties of up to $46,000 for individuals.
12. Know when the property is “on the market”
The auctioneer will announce when bidding has reached the reserve and the property is “on the market.” Before that announcement, the vendor can still pass the property in. After it, the highest bidder wins.
Contract traps at auction
13. No cooling-off period
Under Section 31 of the Sale of Land Act 1962, there is no cooling-off period for properties sold at auction. The contract is binding the moment the hammer falls. This also applies to properties sold within three business days before or after the auction.
14. No conditions
You cannot add subject-to-finance or subject-to-building-inspection conditions at auction. The contract is unconditional. If your finance falls through after auction, you are still liable — and the vendor can keep your deposit and sue for damages.
15. You sign immediately
If you are the winning bidder, you sign the contract on the spot and pay the deposit that day. Settlement follows per the contract terms, typically 30, 60, or 90 days. There is no time to “think about it” — you are committed the moment the auctioneer says sold.
After the auction
If the property passes in (does not reach the reserve), the highest bidder typically gets first right to negotiate with the vendor. In this scenario, it becomes a private sale and the cooling-off period and subject-to conditions may apply — a significantly better position for the buyer.
The bottom line
Auctions reward preparation. Get your contract reviewed before auction day, lock in your finance, set a firm limit, and do not let the adrenaline of the room push you beyond it. The most successful auction buyers are the ones who walk in knowing exactly what they are willing to pay — and walk away when the price exceeds it.
Ready to check your contract? Upload your Section 32 or Contract of Sale at precontractreview.com for a pre-contract check — typically in just a few minutes.