Whether you’re a first-time buyer or a seasoned homeowner, there are a lot of things to consider when it comes to buying a property.

One of the biggest variables that can affect your experience is whether the property is being sold through auction or private sale. As a buyer, this isn’t something that you can control, but what you can control is ensuring your ducks are in a row to give yourself the best chance for success.

Here’s how to make sure you’re all set.

Buying a property at auction

Where you are looking to buy will determine how likely it is that a property will be offered through auction. According to Core Logic auctions are much more common in Sydney, Melbourne and Canberra than the rest of Australia.

The general rule is that the hotter a property market is, the more properties go to auction - real estate agents know that increased buyer competition can drive prices higher. However, in a cooling market, auctions can also be the opportunity to nab a bargain, particularly if a property has been on the market for a while and the vendor is keen to sell.

Auctions are undeniably exciting but can be overwhelming unless you’re familiar with the format. It’s a good idea to attend at least two or three property auctions to learn how they work and pick up some bidding strategy tips before the auction for the property you’re interested in.

When you are ready to bid for a property yourself, it’s important to get an idea of what the potential selling price may be to ensure it’s within your budget. Real estate agents may be able to give you a ‘guide price’, or you can conduct your own research into how similar properties in the area have sold.

Things to know about buying at auction:

  • Pest and building inspections should be completed before the auction day to ensure you’re aware of any issues with the property. Some selling real estate agents may provide this, but it’s usually a good idea to have your own inspection conducted.
  • If you are the successful bidder on the day there is no ‘cooling off’ period, you will have to settle the contract even if the house doesn’t pass inspections or you change your mind.
  • You will normally have to pay the deposit straightaway if you win. There are no laws about the amount of deposit but it is usually 10% of the purchase price. The method of payment will depend on the terms and conditions set by the selling agent and it’s a good idea to check with the agent how they want to accept payment for the deposit.

One last thing to know is that if the seller’s reserve price isn’t met on the day, the property may be ‘passed in’. This means that it hasn’t been sold on the day, but there may be room for the highest bidder to negotiate with the seller to see if a mutually agreeable price can be found. If the property is passed in at auction but contracts are exchanged on that same day, the cooling-off period may not apply (check the laws in your relevant State/Territory).

Buying a property via a private sale

Buying a property through a ‘private sale’ is usually more straightforward and less stressful than an auction. Buyers generally have more time to speak with the real estate agent or vendor to discuss and negotiate the sale.

Buyers also have limited scope to change their mind and there is no set deadline, which can reduce the feeling of pressure.

  • Depending on your State/Territory, there should be a ‘cooling off’ period where you are able to change your mind even after receiving the contract.
  • You can complete pest/building inspections during the ‘cooling off’ period and can withdraw your offer if any issues are found that could reasonably cause you to change your mind. You may still have to pay a penalty for terminating within the ‘cooling off’ period, usually a portion of the property price.
  • Once the contract is signed, you will need to pay your deposit.
  • It’s also worthwhile to consider home and contents insurance from the date you sign the contract, rather than the settlement date when you take possession. This will ensure that the property is covered in the period between these two dates.

Whether you are buying through an auction or a private sale, if you need finance, it’s important to ensure that you have received formal approval before you bid. This will make sure that you are able to complete the purchase with no issues due to finances not being available.

If you’d like to learn more about the pre-approval process, just click through to Qudos Bank’s flexible home loans and talk to one of our specialists.



Loans are subject to approval. Normal lending criteria, terms and conditions and fees and charges apply. Mortgage insurance is required for home loans over 80% and is subject to approval.

Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305 arranges this insurance as agent for the insurer Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL No 234708. We do not provide any advice based on any consideration of your objectives, financial situation or needs (which you should consider before deciding to purchase or hold any product mentioned). Terms, conditions, limits and exclusions apply. Before making a decision, please consider the Product Disclosure Statement. If you purchase this insurance, we will receive a commission that is 10% of the premium paid for each policy. See our Financial Services Guide (available on our website) or ask us for more details before we provide you with services.

 Published October 2019