Buyer’s guide  ·  NSW

Buying property at auction in NSW: what every buyer needs to know

Buying property at auction in NSW? This guide explains how to register, the rules auctioneers must follow, why there is no cooling-off period, and how to prepare before auction day.

Thinking about buying property at auction in NSW? Auctions move fast. If you’re the highest bidder when the hammer falls, you must sign the contract and pay the deposit on the spot. There is no cooling-off period.

That’s why the work you do before auction day matters most. This guide explains how auctions work, the rules agents and auctioneers must follow, and how to prepare so you can bid with confidence.

Updated October 2026 to reflect current law.

What is a property auction?

An auction is a public sale where buyers bid against each other. The property is usually sold to the highest bidder, as long as the bidding reaches the seller’s reserve price.

In NSW, residential auctions are run by a licensed real estate agent or accredited auctioneer. They must follow the Property and Stock Agents Act 2002 (NSW) and the Property and Stock Agents Regulation 2022 (NSW). NSW Fair Trading enforces these rules.

Auctions are very different from a private sale. In a private sale, you usually make an offer, negotiate, and get a short cooling-off period after you sign. At an auction, the contract is binding as soon as you exchange.

Auction terms you should know

• Reserve price: the lowest price the seller will accept. The seller gives it to the auctioneer in writing before the auction. It’s usually kept secret.
• Vendor bid: a single bid the auctioneer can make on the seller’s behalf. It must be announced as a vendor bid.
• Passed in: when bidding doesn’t reach the reserve. The highest bidder is usually given the first chance to negotiate with the seller.
• Fall of the hammer: the moment the auctioneer ends bidding and the property is sold.
• Bidders Record: the agent’s confidential register of everyone who has registered to bid.

How do you register to bid at an auction in NSW?

To bid at a residential auction, you must give the selling agent your name and address and show proof of identity. The agent records your details in the Bidders Record and gives you a bidder number. You must display this number when you bid.

Registering doesn’t mean you have to bid. It just gives you the right to bid.

What ID do you need?

You need one document issued by a government body or financial institution that shows your name and address. A driver’s licence or council rates notice usually works.

If you don’t have one, you can use two documents together. One must show your name and come from a government body or financial institution (such as a passport or Medicare card). The other must show your address (such as a utility bill or lease).

• Certified copies are not accepted.
• Electronic copies are only accepted if the agent agrees.
• You can’t show your ID over a video call.

Bidding for someone else or a company

If you’re bidding for another person or a company, you need a letter of authority, unless you hold a power of attorney. For a company, the letter must be on company letterhead, and the company’s ABN is recorded. This also applies if you bid by phone for someone else.

When should you register?

You can register any time before the auction, for example at an open home. If you pre-register, you still need to show your ID on auction day to get your bidder number. If you arrive late, find the agent quickly and register. The auctioneer can’t accept your bid until you have a number.

Is your information private?

Yes. The agent can’t show the Bidders Record to anyone, including the seller. The agent must keep it secure and can’t use it for any other purpose.

What rules must the auctioneer follow?

Before the auction, the agent must give every bidder a copy of the NSW Government’s Bidder’s guide. The conditions of sale must also be clearly displayed where the auction takes place. These conditions include that:

• the highest bidder is the buyer, subject to any reserve price
• the auctioneer may make only one bid for the seller, and must announce before bidding starts that a vendor bid may be made
• the auctioneer must say it’s a “vendor’s bid” when making it
• the auctioneer can refuse a bid that isn’t in the seller’s interests
• if a bid is disputed, the auctioneer decides and that decision is final
• no bid can be made or accepted after the hammer falls
• the buyer signs the contract as soon as practicable after the hammer falls

Co-owners and executors: sometimes a co-owner of the property (or an executor of a deceased estate) wants to bid. They can bid more than once only if the conditions of sale allow it and the auctioneer announces it, including their bidder number, before bidding starts.

Dummy bidding, collusion and underquoting

Dummy bidding

A dummy bid is a fake bid made to push the price up. The seller can’t bid, and no one can bid for the seller except the auctioneer’s single vendor bid. Dummy bidding is illegal. From 29 June 2026, the maximum court penalty is $55,000 for an individual and $110,000 for a corporation.

Collusion

Collusion is when people agree to hold back bidding, or limit their bidding, to stop open competition. It’s also an offence under the Property and Stock Agents Act 2002.

Underquoting

Underquoting is when an agent advertises or tells you a price that is lower than their own estimate of the selling price. The agent must record that estimate in the agency agreement and update it if the market shows it’s too low. Agents can’t use phrases like “offers above” or a “+” sign after a price.

NSW passed tougher underquoting laws in 2026. These include higher penalties and a new “Statement of Information” for buyers. NSW Fair Trading has said they are expected to start towards the end of 2026. Ask us if you’re unsure what applies to your purchase.

Is there a cooling-off period at auction?

No. Under the Conveyancing Act 1919 (NSW), there is no cooling-off period if:

• you buy the property at the auction, or
• the property is passed in and you sign a contract on the same day as the auction.

If you buy before the auction (a pre-auction offer) or on a later day, the usual cooling-off rules apply. That is generally 5 business days, or 10 business days for an off-the-plan contract. If you cool off, you forfeit 0.25% of the price. Sellers often ask buyers to give up the cooling-off period for pre-auction offers. To do this, your lawyer must sign a certificate under section 66W of the Act. Read more in our guide to the cooling-off period in NSW, and our tips on how to make an offer on a property.

What happens if you win the auction?

1. Sign the contract. You sign straight after the hammer falls. The contract is binding.
2. Pay the deposit. This is usually 10% of the price, paid on the day. If you want to pay less or use a deposit bond, agree this with the seller before the auction.
3. Your lawyer takes over. They do the searches, deal with the seller’s lawyer and prepare for settlement.
4. Settle. You pay the balance of the price on the settlement date in the contract and receive the keys.

If you can’t complete the purchase, you could lose your deposit and be liable for the seller’s other losses. That’s why finance must be ready before you bid.

How to prepare before auction day

• Get the contract reviewed early. Ask your lawyer to review it at least a few days before the auction. Any changes (such as the deposit or settlement date) must be agreed before you bid.
• Confirm your finance. Talk to your lender or broker about how much you can borrow. A pre-approval is not a final loan approval, so ask what conditions still apply.
• Inspect the property. Get a building and pest inspection. For a unit or townhouse, also get a strata report.
• Research the market. Look at recent sales of similar properties nearby.
• Set your limit. Write down your maximum bid before the day, and stick to it. Remember to allow for stamp duty and other costs.
• Have your deposit ready. Check how the agent will accept it and any daily transfer limits with your bank.
• Bring your ID. Take the documents you need to register.

Auction FAQs

Can I make an offer before the auction?

Yes. The seller may consider pre-auction offers. These work like a private sale. The seller will often want you to waive the cooling-off period, so speak to your lawyer first.

What happens if the property is passed in?

The highest bidder usually gets the first chance to negotiate with the seller. If you sign a contract on the same day, there is no cooling-off period.

Can I bid on behalf of someone else?

Yes, but you must give the agent a letter of authority from that person or company when you register.

Do I have to pay a 10% deposit?

Usually, yes, unless you negotiate a lower deposit or a deposit bond with the seller before the auction. Your lawyer can ask for this when reviewing the contract.

Can I pull out after winning an auction?

Generally, no. There is no cooling-off period, so you are bound by the contract. Pulling out can mean losing your deposit and paying the seller’s losses.

This article is general information only and is not legal advice. It reflects NSW law at the date of publication. Please contact us for advice about your circumstances.

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