Buying at auction in NSW is different from buying by private treaty in one decisive way: there is no cooling-off period. If the hammer falls and you are the highest bidder, you must sign the contract then and there and pay the deposit — usually 10% of the purchase price. The same is true if the property is passed in and you exchange contracts on the same day as the auction.
Do the work before you register to bid
- Finance you can settle on. Confirm with your lender the maximum you can borrow, including transfer duty and other costs, and do not treat a conditional pre-approval as a guarantee for that specific property.
- Building, pest and strata reports. Commission independent inspections and, for a strata property, a strata report. You are generally buying the property as it is.
- Contract review. Give the contract to your solicitor or licensed conveyancer in time to negotiate any changes in writing before auction day. Terms are much harder to reopen after the hammer falls.
- Know the deposit arrangements. Confirm how the deposit must be paid (for example electronic transfer, bank cheque or a deposit bond if the vendor will accept one).
- Set a firm limit. Write down the maximum you will bid, including a clear walk-away point, before you enter the room or join the phone bid.
On the day
You must register with valid identification to receive a bidder’s number. Dummy bidding is illegal. Towards the end of the auction the auctioneer will call for final bids and count down the fall of the hammer. No bids can be made after the hammer falls. The successful bidder must sign and exchange immediately.
If you cannot complete the contract after a successful bid, you risk losing the deposit and may be liable for any loss the vendor suffers if the property later resells for less.
If the property is passed in
You may be invited to negotiate with the vendor. Do not assume that a cooling-off period now applies. NSW guidance is that a same-day exchange after a passed-in auction also has no cooling-off period. Have your solicitor review any revised offer before you sign.
How this compares with private treaty
On an ordinary residential private-treaty purchase in NSW you usually have a five business-day cooling-off period after exchange, ending at 5pm on the fifth business day. Off-the-plan contracts generally have ten business days. If you withdraw during cooling-off you must pay the vendor 0.25% of the purchase price. You can waive cooling-off by giving the vendor a section 66W certificate — take advice before you do. None of those safety nets apply at auction.
For a practical tick-list, use our due-diligence checklist and toggle the auction items. Last reviewed: November 2026.