Pre-Auction Checklist: 10 Things to Do Before Bidding on Property in Australia

Buying property at auction in Australia is exciting but unforgiving. The moment the hammer falls, the contract is legally binding — there is no cooling-off period, no subject-to-finance clause, and no opportunity to renegotiate. Every piece of due diligence must be completed before you raise your hand to bid. This pre-auction checklist covers everything you need to research, organise, and prepare so you can bid with confidence and avoid costly mistakes on the day.

1. Research the Property and Comparable Sales

Before you even consider bidding, you need to establish a realistic price range for the property. The agent's price guide is a starting point, but it should not be your only reference.

• Search for recent comparable sales in the same suburb — properties of a similar type, size, age, and condition that have sold in the past 3 to 6 months
• Check median prices and price trends for the suburb to understand whether the market is rising, stable, or falling
• Attend multiple open inspections to compare the property against others currently on the market
• Note the property's specific features (renovation quality, land size, aspect, parking, proximity to transport and schools) and how they compare to recent sales
• If available, review the property's sales history to see what the vendor originally paid and when

This research forms the foundation for setting your maximum bid. Without it, you are guessing — and guessing at auction is expensive.

2. Obtain and Review the Vendor Statement

The vendor (seller) is legally required to provide certain disclosures before auction. In Victoria, this is the Section 32 Statement (Vendor's Statement). In NSW, the equivalent information is contained in the contract annexures and schedules. In Queensland, the seller's disclosure statement accompanies the contract.

Request these documents as early as possible and have your solicitor or conveyancer review them. Key items to check include:

For a detailed breakdown, read our guide to reading a property contract.

3. Arrange Finance Pre-Approval

Because auction contracts are unconditional, you cannot include a subject-to-finance clause. If you win the auction and your loan is subsequently declined, you are still legally bound to complete the purchase. Failing to settle can result in losing your deposit and facing a damages claim from the vendor.

Before auction day, you must have:

• Formal pre-approval from your lender — not just an online calculator estimate or indicative approval
• A clear understanding of your borrowing limit, including any conditions the lender has placed on the approval
• Confirmation that pre-approval is still current and has not expired (most pre-approvals are valid for 3 to 6 months)
• Awareness of whether the lender requires a valuation before issuing final approval — if the valuation comes in below the purchase price, you may need to fund the shortfall

Ideally, your pre-approval should be unconditional (subject only to a satisfactory valuation of the specific property). Conditional pre-approvals that still require verification of income, employment, or other documents carry a higher risk of falling through.

4. Commission a Building and Pest Inspection

You cannot make an auction purchase conditional on a building and pest inspection. This means you must arrange and pay for the inspection before auction day, knowing that if you do not win, the cost is lost.

A standard building and pest inspection costs $400 to $800 depending on the property size and location. The report will identify:

• Structural defects (cracking, subsidence, foundation issues)
• Roof condition and any water damage
• Plumbing and drainage problems
• Electrical safety concerns
• Termite activity or damage, and other pest infestations
• Asbestos or other hazardous materials
• Non-compliant building work or unapproved additions

If the inspection reveals serious issues, you have three options: factor the repair costs into your maximum bid, reduce your bid accordingly, or decide not to bid at all. This is a decision that must be made before auction day. For more on inspections, see our property due diligence checklist.

5. Have the Contract Legally Reviewed

Obtain a copy of the contract of sale from the selling agent well before auction day and have your solicitor or conveyancer review it in detail. They should check for:

• Unusual or unfavourable special conditions
• Settlement period and whether it suits your circumstances
• Inclusions and exclusions (fixtures, fittings, appliances)
• Deposit amount and payment terms
• Any clauses that limit your rights or impose additional obligations
• Completeness and accuracy of vendor disclosures

If your solicitor identifies problematic clauses, they may be able to negotiate amendments with the vendor's solicitor before the auction. However, the vendor is under no obligation to agree. You can also use Realestate Lens's contract analysis to get an AI-powered review of the key terms and potential red flags.

6. Set Your Maximum Bid

This is arguably the most important step. Your maximum bid should be a firm number that you commit to before auction day — and do not exceed under any circumstances. To arrive at this number:

Write this number down. Share it with anyone accompanying you to the auction. The competitive atmosphere of an auction can make it tempting to bid "just one more time" — having a firm, pre-agreed limit prevents emotional overspending.

7. Register to Bid

On auction day, you must register with the selling agent before bidding begins. Registration typically requires:

• Photo identification (driver's licence or passport)
• Your full legal name and contact details
• If bidding on behalf of another person or entity, written authorisation from the buyer

You will receive a bidder number or paddle. Only registered bidders may participate in the auction. Arrive early to allow time for registration and to settle your nerves before bidding starts.

8. Bidding Strategies

There is no single correct approach, but experienced buyers and buyer's agents commonly use these tactics:

• Open strongly: A confident early bid near the expected range can signal serious intent and discourage less committed bidders
• Bid in decisive increments: Round-number bids ($5,000 or $10,000 jumps) keep the pace moving. Switching to smaller increments near your limit signals the price is approaching a ceiling
• Stay calm and composed: Hesitation invites competition. Quick, decisive bids suggest you have significant budget remaining
• Respect your limit: When bidding reaches your pre-set maximum, stop. No property is worth financial distress

For a deeper dive into auction tactics, read our complete guide to buying at auction.

9. What Happens If You Win

If you are the highest bidder at or above the reserve price, the property is sold to you. The following happens immediately:

The binding and unconditional nature of auction contracts is why every item on this checklist must be completed beforehand. There are no second chances once the hammer falls.

10. What If the Property Is Passed In

If bidding does not reach the vendor's reserve price, the property is "passed in." This is not uncommon — in many markets, 30 to 40 percent of auctions result in a pass-in. The highest bidder typically gets the first right to negotiate privately with the vendor.

In post-auction negotiations:

• You are negotiating a private treaty sale, but cooling-off rights may not apply if the sale occurs on the same day as the auction (rules vary by state)
• You may be able to negotiate a price below the reserve
• You can attempt to include conditions (such as subject to finance or building inspection), though the vendor is under no obligation to accept them
• If no agreement is reached, the property will usually be listed for private sale

This article provides general information only and is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before bidding at auction.