Auction-day due diligence: the buyer's checklist

Why an auction is different

Buying at auction strips away every safety net a private-treaty buyer leans on. There is no cooling-off period at auction anywhere in Australia — once the hammer falls and you are the highest bidder, the contract is unconditional and binding immediately. No finance clause, no inspection clause, no few days to reconsider. Every protection that lets a private-treaty buyer back out is simply absent.

It can reach a little wider than the auction itself. In Victoria, for example, there is also no cooling-off if you buy the property within three clear business days before or after the scheduled auction — so signing just before or just after the event carries the same finality. The rules sit in each state's sale-of-land legislation; the principle is consistent across the country. See cooling-off periods by state for how private-treaty timing differs.

The checks to clear before you bid

1. Contract & Section 32 reviewed by your conveyancer or solicitor — see how to read a Section 32.
2. Building and pest inspection completed — one you commissioned, not a vendor-supplied report.
3. Finance unconditionally approved — pre-approval is not the same thing (see below).
4. Deposit ready — usually around 10%, payable on the day by the method the agent specifies.
5. Your maximum price set in writing — with a plan to stop there, whatever the room does.

Contract and Section 32

Have the vendor statement and contract reviewed by your conveyancer or solicitor, not skimmed by you. They are reading for what is disclosed — and, more tellingly, what should be there but is not. In Victoria the contract and Section 32 must be available for inspection for three business days before the auction, so there is time to have them checked properly. A special condition buried in an auction contract is exactly the kind of thing a professional review catches and you would not.

Building and pest, done in advance

Because you cannot make the purchase conditional on an inspection, the inspection has to happen first. Commission your own building and pest report on the property before auction day — a vendor-supplied report was commissioned for the sale, not for you. If anything needs a specialist follow-up, that has to be resolved before you bid too, since there is no window to do it afterwards.

Pre-approval is not unconditional approval

This is the trap that catches first-time auction buyers. Pre-approval is a lender's indication, usually subject to conditions — valuation, final checks, sometimes the specific property. Because there is no finance clause at auction, if your lender later values the property below the price or declines, you are still bound to settle. Confirm with your broker or lender exactly how firm your approval is for this property at this price before you bid — not after.

Deposit and your limit

Have the deposit — usually around 10% — ready to pay on the day, by the method the agent specifies. And set your maximum in advance, in writing, with a reason to hold it. Auctions are designed to pull bidders past their limit; the discipline of a number you decided when you were calm is most of what protects you when you are not.

What happens if you win and can't settle

There is no second chance. If you win and then cannot complete — finance falls through, a defect surfaces, circumstances change — you risk forfeiting your deposit and may be liable for the vendor's losses, including any shortfall if the property is re-sold for less. This is the whole reason the checks come first: at auction, the consequences of bidding before you are ready land entirely on you. If you are not certain on all five points above, the right move is not to bid.