Lot 2 of 6 · Auction day
Bidding at a NSW auction
To bid at a residential auction in NSW, a buyer registers with the selling agent, shows proof of identity and is given a bidder’s number. If the hammer falls on their bid, they sign the contract and pay the deposit on the spot, and there is no cooling-off period.
The running order
An auction is a public sale run by a real estate agent acting as auctioneer, and Fair Trading sets out how one runs in five stages.
Register
Anyone who wants to bid registers with the seller’s agent and is given a bidder’s number. Registration can happen at any time before the auction, such as at an inspection, or on the day; a buyer who pre-registers still shows proof of identity on the day before receiving the number.
Bid
The auctioneer runs the bidding, takes bids and keeps track of the current price. The number has to be displayed with each bid, and the auctioneer must not accept a bid from anyone who is not registered and numbered.
Reserve
The seller sets a reserve price with the auctioneer before the auction, usually without advertising or disclosing it. If bidding stalls below it, the auctioneer privately asks the seller whether they will sell for less; if bids still fall short, the property may be passed in, and the highest bidder then generally has the first chance to negotiate with the seller.
Hammer
Towards the end, the auctioneer calls for final bids and then counts down to the fall of the hammer. After it, no bid can be made, and the highest bidder is legally obliged to sign and exchange contracts.
Exchange
The successful bidder signs the contract of sale and pays the deposit on the spot, usually 10% of the price. There is no cooling-off period when buying at auction.
What registration asks for
The bidder gives the selling agent their name and address and shows proof of identity. Without these details, they will not be able to bid.
One document
Something from a government or a financial institution that carries both name and address. Fair Trading’s examples:
- a council rates notice
- a NSW photo card, or a driver’s licence
- the vehicle’s registration papers
Or two together
One showing the name, issued by a government or financial institution, such as a passport, Medicare card, ATM, EFTPOS, credit or store card, birth certificate or citizenship papers.
Plus an address
One showing the address, such as a utilities bill, a rental agreement, or a statutory declaration stating the address.
Certified copies are not accepted. Documents can be produced electronically if the agent consents, but holding them up on a video call is not permitted.
The agent writes the bidder’s name, address and identity number into the Bidders Record and hands over the number, which goes back to the agent after the auction. Nobody may see that record except an authorised person from NSW Fair Trading, not even the property’s owner, and it may not be used to contact bidders.
When someone else bids
Two people buying together, such as partners, need only one of them to register. Anyone bidding for another person or a company registers in their own name and shows the agent a letter of authority; for a person it carries their name, address and an identity number such as a driver’s licence number, and for a company it is on letterhead, with the ABN recorded as the company’s proof of identity. The same applies to bidding for someone on the telephone.
A buyer’s agent fits into this as a proxy with a licence. When a licensed agent registers to bid for a buyer, the Bidders Record carries their licence number, and they may show their agency authority instead of a letter. Under the auction conditions, every bidder is taken to be bidding for themselves unless, before bidding, they have given the auctioneer a copy of a written authority to bid for someone else. And Fair Trading’s duties for buyer’s agents include not going past the agreed price at auction without the buyer’s express written authority.
The vendor bid, and the bids that are illegal
The auctioneer may make one bid on the seller’s behalf, and only if the right to make it is in the conditions of sale (which must be displayed before the auction starts) and the auctioneer announced before the auction that they may make it. The auctioneer must announce that it is a vendor bid immediately before or while making it. A co-owner, executor or administrator may bid more than once, but only where the conditions allow it and the auctioneer has announced it, along with their bidder number, before bidding starts.
Dummy bidding is illegal, and so is colluding with someone to interfere with free and open competition at an auction. It is also an offence for an auctioneer to invent bids. From 29 June 2026, the maximum court penalty for dummy bidding rose to $55,000 for an individual and $110,000 for a corporation.
| Conduct | Individual | Corporation |
|---|---|---|
| Making a dummy bid for the seller, arranging one, or asking for one; an agent or auctioneer involved in it | $55,000 | $110,000 |
| Colluding to interfere with free and open competition at an auction | $55,000 | $110,000 |
Source: NSW Fair Trading, Buying property at an auction, and Changes to property and stock agents laws (published 8 July 2026).
After the hammer
Fair Trading is plain about the stakes: a bidder who cannot complete loses the deposit and may be liable for damages the seller suffers. Its own preparation list for auction day includes confirming borrowing limits with a lender, building and pest reports, any strata report, and a review of the contract by a solicitor or licensed conveyancer. The strata lot and the contracts lot cover those last two.
Once contracts are exchanged, the buyer’s solicitor or conveyancer carries out searches on the property, and the two legal representatives arrange settlement, when the balance of the price is paid. If the property is passed in and contracts are exchanged the same day, there is still no cooling-off period. Late arrivals can still bid once registered: a raised hand tells the auctioneer a bid is coming, and bids can be accepted as soon as the bidder has a number.