Selling property by auction

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Public auctions of land are banned before 1pm on Anzac Day (25 April). For more information on sale of land law changes, view Sale of land changes – Legislation update.

Auctioning your property

A property auction is a public sale governed by strict rules. It is:

  • advertised for a specific place, time and date. Prospective buyers bid and the property is offered to the highest bidder, and
  • usually conducted by an agent acting as an auctioneer.

There is an advertising campaign generally with open house inspections for several weeks leading up to the auction date. You do not have to advertise a reserve price or advise the agent of your asking price. However, the agent cannot advertise the property at a price that is less than your asking price, if you have provided such a price, their estimated selling price, or at a price you have already rejected. For more information, view Understanding underquoting.

On the day of the auction the property may be open for inspection, for at least half an hour before the bidding starts. For more information on the rights of landlords, agents and renters in relation to open for inspections, view Landlord or owner entry to the property.

Pre-auction offers

If you agree to consider pre-auction offers, buyers can make an offer through an agent before the auction. This may be in the form of a signed contract and the process of negotiation is the same as a private sale. For more information, view Buying property by private sale.

If the buyer makes you an offer and it is accepted less than three clear business days before the auction date, the buyer does not get a cooling-off period. For more information, viewCooling off on a property sale - Buying property by private sale.

Auction conduct

There are strict rules about how an auctioneer conducts an auction, and how people attending one must behave. Substantial penalties may apply to anyone who breaks these rules.

The auction rules and an information sheet that explains auction laws in Victoria must be displayed for at least 30 minutes before the auction starts. The rules and information sheet are set out in the Schedules to the Sale of Land (Public Auctions) Regulations 2014, which also sets out what the auctioneer must say.

Before bidding starts, the auctioneer must tell bidders:

  • the auction will be conducted according to the auction rules
  • the rules prohibit bids being accepted after the fall of the hammer
  • they will be identified on request
  • it is against the law to make a false bid, hinder another bidder, or in any way intentionally disrupt an auction
  • substantial penalties apply to anyone who engages in illegal auction conduct
  • whether or not there will be vendor or co-owner bids
  • any additional conditions that apply to the auction.

During the auction, anyone can ask the auctioneer a reasonable number of questions about the property, the contract, or the auction.

The auctioneer may:

  • refuse a bid at any time during the auction, including when the auction hammer is falling
  • if there is a dispute over a bid, resume the auction at the last undisputed bid or start the bidding again
  • refer a bid to you at any time before the conclusion of the auction
  • withdraw the property from sale at any time.

Vendor and co-owner bids

Vendor and co-owner bids are allowed at auctions.

The arrangements for making vendor and co-owner bids must be:


  • set out in the rules displayed before the auction starts
  • announced by the auctioneer at the start of the auction.

Vendor bid

The auctioneer can bid on your behalf if you are not satisfied with the amount of the last bid. This type of bid:

  • can only be made by the auctioneer
  • must be announced by the auctioneer when the bid is made.

It is illegal for you to bid from the crowd, or to ask another person to bid on your behalf, to increase the price for your property.

Co-owner bid

When a property is jointly owned, one or more of the owners may bid from the crowd if they genuinely want to buy the property.

Co-owners may bid themselves or through a representative in the crowd, but not through the auctioneer.

Dummy bidding

All dummy bids are illegal and attract significant penalties.

A dummy bid is either a:

  • false bid made up by the auctioneer
  • bid accepted by the auctioneer from a non-genuine bidder from the crowd.

Auction language: ‘on the market’ and ‘passed in’

On the market

The auctioneer may halt proceedings and say they are ‘going inside’ or ‘seeking advice or instructions’. This is when the auctioneer will speak to you privately about the progress of the bidding.

If the bidding is close to or has reached your reserve price (the lowest price at which you will sell), the auctioneer will ask if you will sell at the last bid or any higher bid that is made.

If you agree, the auctioneer will tell the crowd that the property is ‘on the market’. This means the property will be offered to the highest bidder.

If bidding has not met your reserve, the auctioneer will seek more bids. If bids still do not meet the reserve, the property may be ‘passed in’ or ‘withdrawn from auction’.

Passed in

If bids do not meet your reserve or another price at which you are willing to sell, the property will be ‘passed in’.

The highest bidder then has first right to negotiate with you. This includes if the property was passed in on a vendor's bid.

When is the property sold?

The property is sold when you and the successful bidder at auction have signed the contract of sale.

Signing the contract of sale

Immediately after the auction, the successful bidder is invited to sign the contract to formalise their offer. You can accept the offer by also signing the contract. You and the buyer will each receive a copy of the signed contract.

As this is an auction, the buyer must pay a deposit upon signing the contract and cannot make the contract subject to conditions.

Some buyers may not have a full deposit on the day of the auction. You may agree to change the contract to allow for a part deposit, with the remaining amount due on a specified date.

The buyer has no cooling-off period for a property purchased at auction.

The sale is finalised at settlement when:

  • all checks have been made, such as the condition of the property and measurements of the land
  • the title and transfer documents have been exchanged
  • the balance of the purchase price has been paid.

If your property does not sell at auction

If your property is passed in and is not later sold to the highest bidder, it may be offered for private sale or taken off the market. You will generally be required to pay the marketing expenses and auctioneer’s fee, but not the agent’s commission.

You should reconsider your asking price. Ask the agent for feedback on what people are saying about the price, features and condition of your property.

If you do not have to sell urgently, consider withdrawing your property from the market. Keeping a property on the market for a long time can reduce the likely selling price. You can put it back on the market later.

Check the termination date on your sales authority (your agreement with the agent). If they do not have exclusive selling rights, try another agent. A fresh approach and a new marketing campaign may be successful.