1. What Is a Property Auction in Victoria?
An auction is a public sale where buyers bid for a property. In Victoria, auctions are unconditional, meaning once the property is sold, the buyer must follow through — no cooling-off period, finance, or building and pest conditions.
Here is a video below of Thomas Larkin, a real estate agent based in Frankston, Melbourne hosting a team training session about all things Auction:
2. How Long Is a Typical Auction Campaign?
An auction campaign usually runs for 3–4 weeks.
- Week 1–2: Open for inspections begin, no offers are generally accepted.
- Week 2: The agent meets with the vendor to assess interest at halftime.
- Week 3–4: Buyers get organised, inspections and contract reviews happen, and registrations (informal in VIC) are completed.
- Auction Day: The property goes to auction, usually on a Saturday.
3. What Happens Before Auction Day?
From the Agent’s Side:
- Agents generally don’t sell within the first 2 weeks of campaign.
- Buyers are followed up weekly to check readiness.
- Some vendors and agents meet mid-campaign to decide if they’ll run the auction or accept a pre-auction offer.
From the Buyer’s Side:
- Buyers should complete due diligence early in the week of auction:
- Contract review
- Building & pest inspections
- Organise finances
- Avoid last-minute changes (e.g., Friday afternoon) — agents and conveyancers won’t have time.
4. Key Documents Involved in an Auction Sale
- Contract of Sale: Same as private sale, but unconditional.
- Section 32 (Vendor Statement): Includes planning overlays, easements, zoning, bushfire or flood zones, and other disclosures.
- No cooling-off period or subject-to clauses are permitted under auction conditions.
5. What Happens on Auction Day?
Pre-Auction Setup:
- Agents meet at 9am to assign staff to bidders.
- All bidders are called at 9:30am to confirm attendance.
- Bidding paddles are handed out at the property.
- Do not need to register bidder’s prior to Auction
Vendor Meeting:
- At auction time, agent quickly meets vendor to:
- Confirm who’s attending
- Set reserve price
- Lock in terms (settlement, deposit)
Auction Format:
- Introduction: Agent explains rules, process, and announces vendor bids will be used.
- Icebreaker: Often a joke auction (like a teddy bear) to relax the crowd.
- Bidding Begins: Agent may use up to 2 vendor bids to stimulate bidding.
- Going Once… Twice… Sold or Passed In:
- If bidding meets reserve, property is sold.
- If not, it may be passed in (unsold).
6. What Is a Vendor Bid?
A vendor bid is a bid placed by the seller via the agent to stimulate bidding.
- Unlimited vendor bids are allowed legally.
- Most agents only place 1–2.
- Vendor bids are announced clearly.
- The final vendor bid is usually placed close to reserve when interest is low.
7. What Happens If a Property Passes In?
If a property passes in:
- The highest genuine bidder (not a vendor bid) gets first right to negotiate.
- The agent cannot negotiate with others unless:
- That bidder walks away or
- Gives permission for the agent to talk to someone else.
Note: The reserve price the agent gives after the pass-in is often inflated (has “fat”) — it’s not the true reserve.
8. Common Agent Strategies & Tactics
- Holding back reserve price: Agents won’t share reserve unless asked directly.
- Inflating reserve after pass-in: E.g., reserve might be $1M, but agent tells you $1.02M.
- Fake urgency tactics: Placing “backup buyers” nearby to create pressure.
- Non-disclosure close: Agent won’t tell you other offers and sets a deadline (e.g., “Best and final by 5pm”).
9. Bidding Strategies for Buyers & Advocates
Quick Bidding:
- Bid fast and confidently to show you’re serious. It intimidates others.
Shadow Bidding:
- A second bidder (e.g. family member) enters late to confuse and exhaust other bidders. Legal if not colluding dishonestly.
Awkward Offers:
- Early, high offers with short expiry (e.g. 24 hours) can disrupt the auction campaign.
- Can force agent to lift quote range — scaring away other buyers.
10. Remote or Phone Bidding
- Phone bidding is preferred over online bidding tools like Gavel (which can fail if internet drops out).
- Auctions are often recorded for legal and disclosure reasons (especially if there are material facts like unreported incidents).
11. Legal Requirements for Agents
- Must announce when placing a vendor bid.
- Must disclose the reserve price if directly asked (once it's set).
- Must give the highest bidder the first right to negotiate if the auction passes in.
12. What Happens After a Successful Auction?
- Contract must be signed immediately, even for remote bidders.
- Sign with confirmed entities or and/or nominees
- Agent prefers DocuSign or RealTime Agent for e-signatures.
- Deposit is paid via EFT:
- Often split between Saturday/Sunday due to transfer limits.
- Screenshot of payment is sent to the agent.
Important: If contract isn’t signed promptly, vendor may become nervous — organise buyer in advance.
13. Why Do Agents Love Auctions?
- Profile: Public auctions attract neighbours, grow agent brand.
- Unconditional sales: No finance delays, fewer admin issues.
- Speed: Quick resolution, avoids long negotiations.
Agents may prefer advocates because:
- They’re more organised.
- Deals are more likely to go through.
- Communication is smoother (agent-to-agent).
14. When Do Agents Sell Before Auction?
- Only when there’s one serious buyer.
- Sale will be via “best and final, non-disclosure.”
- If an agent says, “Vendor wants to sell early,” they probably have no one else.
15. Other Agent Tricks to Watch For
- Multiple reserves: Some agents prepare different reserve figures depending on buyer strength.
- High dummy reserves: If they know you have more money, they may bump it up.
- Pass-in and wait: Agents may delay negotiation to let buyer “sweat it out.”