Buying at auction in Victoria: what to sort out before you raise your hand

There is no cooling off period at auction. None. If the auctioneer knocks the property down to you, you have bought it, and you cannot change your mind on Monday because the building inspector found something or the bank went quiet.

That single fact reorganises everything. In a private sale you get three clear business days to withdraw under section 31 of the Sale of Land Act 1962, and the vendor keeps $100 or 0.2 per cent of the purchase price, whichever is greater. At auction that safety net is gone. So is the ability to attach conditions. Everything you would normally sort out in the fortnight after signing has to be finished before you stand on the nature strip.

The exclusion is wider than auction day itself

Most people know the hammer is binding. Fewer know the rule extends either side of it.

Cooling off does not apply where the land is sold at a publicly advertised auction, or within three clear business days before or after the day that auction is held. That is the wording of section 31(5) of the Sale of Land Act 1962, and Consumer Affairs Victoria says the same in plainer words. That catches the pre-auction offer, which is where a lot of buyers in Cranbourne and Clyde North get caught out. The agent rings on Wednesday, says the vendor will consider an offer before Saturday, and it feels like a private sale. It is not. Sign on Wednesday for a Saturday auction and you have no cooling off rights at all.

It also catches the property passed in and negotiated on the spot. A deal done twenty minutes later is inside the window.

The other statutory carve-outs are narrower: land used primarily for industrial or commercial purposes, farming land over 20 hectares, a repeat contract between the same parties on substantially the same terms, and purchasers who are estate agents or corporate bodies.

Get the contract and section 32 read before auction day, not after

This is the whole game. You are signing an unconditional contract in front of a crowd, so the only time you can raise a problem is beforehand, when the vendor still wants your bid.

The section 32 vendor's statement sets out what you are actually buying. The Sale of Land Act 1962 fixes what has to be in it: title and mortgage details, easements and covenants, the planning scheme and the zoning, financial outgoings such as rates, a statement if the land is in a designated bushfire prone area, and whether a growth areas infrastructure contribution is imposed. Consumer Affairs Victoria's buying checklist says to have your legal practitioner or conveyancer check the section 32 and the contract of sale before you commit.

What we look for in a growth corridor sale is specific. A covenant restricting a second dwelling on a Botanic Ridge block. An owners corporation fee on a Lynbrook townhouse that you have not budgeted for. A growth areas infrastructure contribution, a one-off charge on land in Melbourne's growth areas triggered when land is bought, subdivided or developed. A settlement period that does not match your finance. Any of those can change your number, or stop you bidding. None can be fixed on Saturday.

Send us the contract early in the week. Our contract review service exists for exactly this.

If the statement turns out to be wrong or incomplete after you have bought, that is a dispute, not conveyancing work. A licensed conveyancer cannot act in a dispute or at VCAT, so you would need a solicitor.

Finance has to be genuinely unconditional

Pre-approval is not approval. It is a lender's view of you, often subject to valuation, and a valuation is a view about the property.

Consumer Affairs Victoria is direct about this: if you plan to buy at auction, arrange a pre-approved loan, because you cannot make the contract subject to finance without the vendor's agreement, and vendors rarely agree.

Three questions worth putting to your broker or lender before Saturday:

1. Is the approval subject to a satisfactory valuation, and what happens if the property values below my top bid?
2. Does the approval cover this specific property type and this suburb?
3. When does the approval expire, and does it cover a 60 or 90 day settlement?

Say you bid $785,000 and the valuer comes back at $750,000. You cover the gap in cash by settlement. The contract does not care that you were surprised.

Deposit ready, in the right form

The deposit is usually 10 per cent of the purchase price, though Consumer Affairs Victoria notes there are no laws about the amount of deposit. It goes into a trust account held by the seller's estate agent, conveyancer or legal practitioner until settlement. It does not go to the seller.

You pay it on the day, so have it available on the day. Check with the agent during the week how they want it, because transfer limits catch people out. If you want the vendor to accept a smaller deposit, get that agreed in writing before the auction. If the money is locked in a term deposit, break it now.

Inspections happen before, or they do not happen

The buying checklist says it in one line. Get the inspection report before the auction, because you cannot put conditions on the contract of sale at an auction without the vendor's agreement.

A building and pest inspection on a 1990s Cranbourne brick veneer is not an extravagance. Sellers and agents must also make the due diligence checklist available to buyers of residential property, and it flags what is worth checking: electrical safety, unapproved building work, asbestos, termites, flood and bushfire risk, and planning controls.

Inspections on properties you miss out on feel like wasted money. They are cheaper than owning a house with stumps that need replacing and no contractual way out.

How the bidding actually works

The rules are set by the Sale of Land Act and the Sale of Land (Public Auctions) Regulations 2024, in force since 23 June 2024.

Read the rules on the fence

The auction rules, the prescribed information statement and any additional conditions must be on display for at least 30 minutes before the auction starts. Get there early and read them. This is where you find out whether vendor bids are permitted and what conditions sit alongside the contract.

The announcements

Before bidding opens the auctioneer must tell the crowd that the auction runs under the displayed rules, that late bids are prohibited, that bidders will be identified on request, and that the law fines people for false bids, major disruption and attempts to stop others bidding.

Reserve, vendor bids and passing in

Four terms, as Consumer Affairs Victoria defines them.

Term	What it means for you
Reserve price	The lowest price the seller will accept. Once bidding reaches it, the auctioneer announces the property is on the market.
Vendor bid	A bid on the seller's behalf. It can only be made by the auctioneer and must be announced when it is made.
Dummy bid	A fictitious bid, or one taken from a non-genuine bidder. Illegal, and it attracts significant penalties.
Passed in	Bidding stopped below the reserve. The highest bidder then has first right to negotiate.

Being the highest bidder on a property passed in is a real position of strength. Use it, but remember the cooling off exclusion still runs for three clear business days afterwards.

What the purchase costs beyond the hammer price

Land transfer duty is the big one. It is calculated on the dutiable value, which the State Revenue Office describes as the price you paid or the market value if that is more, and it has to be paid before the transfer can be registered, usually at settlement. Penalty tax and interest may apply if duty is not paid within 30 days of settlement.

First home buyers should run the numbers before setting a bidding limit. The State Revenue Office applies no duty up to $600,000 and a reduced amount between $600,001 and $750,000, with a requirement to live in the home for 12 continuous months starting within 12 months of settlement.

That concession is a slope, not a cliff. Section 57JA of the Duties Act 2000 works out the concessional duty by taking the duty you would otherwise pay and multiplying it by the dutiable value less $600,000, divided by $150,000. So the concession shrinks as the price rises: a first home buyer paying close to $750,000 is already paying very nearly full duty, and shaving a bid to land just under the threshold saves less than people assume. Get your actual duty figure before auction day. If your situation involves trusts, company structures, tax planning or a self managed super fund, that is a question for an accountant or a solicitor rather than a conveyancer.

Budget also for inspections, conveyancing costs, council and water rate adjustments at settlement, and lender fees.

The week before: a workable order

1. Monday: request the contract and section 32 from the agent and send them to us.
2. Tuesday: book the building and pest inspection.
3. Wednesday: confirm with your lender that the approval is in writing, current, and covers this property.
4. Thursday: we come back to you on the contract, and anything you want changed goes to the vendor now.
5. Friday: confirm the deposit is accessible and check how the agent wants it paid.
6. Saturday: arrive 30 minutes early and read the displayed rules.

Most Melbourne auctions are held on a Saturday. Our office hours are Monday to Friday, and we can see you on a weekend by appointment, so if you are bidding on Saturday and something needs checking, call us.

Frequently asked questions

Is there ever a cooling off period when buying at auction in Victoria?

No. Under section 31(5) of the Sale of Land Act 1962, cooling off does not apply where land is sold at a publicly advertised auction, and it also does not apply where the sale happens within three clear business days before or after the day of that auction. That covers pre-auction offers and deals done straight after a property is passed in.

Can I make an auction purchase subject to finance or a building inspection?

Only if the vendor agrees, and they usually will not. Consumer Affairs Victoria advises getting your loan pre-approved and your inspection report completed before auction day for this reason. Any condition has to be negotiated in before the auction starts.

What happens if I win the auction and then cannot settle?

You are in breach of a binding contract. What follows depends on that contract's default provisions, and the consequences can be serious, including losing the deposit. That is a dispute rather than conveyancing work, so it is a solicitor's area, which is exactly why it is the scenario to avoid.

Will I have to identify myself to bid?

Possibly, so carry identification. Before bidding starts the auctioneer must announce that bidders will be identified on request. The rules that apply at that particular auction go on display at least 30 minutes beforehand, so read them when you arrive.

Talk to us before Saturday, not after

Bidding on something in Cranbourne, Clyde North, Berwick or Pakenham? Send us the contract and section 32 as soon as the agent releases them. We will read them properly and tell you in plain language what is in there.

Our office is at Office 4, Level 1, 105A High Street, Cranbourne, and we act on property purchases across the corridor and statewide through PEXA. Call 0450 016 397, email convey@wisestep.com.au, or ask us for a quote.

Auction day is the wrong day to read a contract for the first time. Give yourself the week.

This article is general information about Victorian conveyancing and is not legal advice for your particular transaction. Speak to us about your specific circumstances.