Auction Rules QLD

Bidding at an auction can be exciting, but it might also feel a little overwhelming if you haven’t done it before. This guide will help explain how auctions work and what both the auctioneer and the bidders are expected to do.

Since 21 August 2006, a law has required that everyone who wants to bid must first give the auctioneer their name, address, and proof of identity. Without this, their bids can’t be accepted.

What Is An Auction?

At a real estate auction, a property is sold to the person who makes the highest offer. People who want to buy the property make bids, and whoever bids the most wins the chance to buy it.

These auctions can happen in person or online and are run by a real estate agent who has a special license that lets them work as an auctioneer.

Auction Rules Australia-Wide

Although the rules can vary slightly between states, some auction rules are the same throughout Australia. Here are a few key ones:

• Auctions are unconditional, which means there’s no cooling-off period once the property is sold.
• Dummy bids (fake bids made to increase the price) are not allowed.
• Vendor bids (bids made on behalf of the seller) must be clearly announced to everyone.
• When the bidding reaches the seller’s reserve price (the lowest amount they will accept), the property is considered on the market and will be sold to the highest bidder when the hammer falls.
• If the bidding does not reach the reserve price, the highest bidder has the first opportunity to negotiate with the seller.
• After the auction ends, the buyer signs the contract and pays a deposit straight away.

Queensland

Before an auction begins, buyers must register because only registered bidders are allowed to place bids. The person running the auction must have a special auctioneer’s licence, a normal real estate licence isn’t enough.

In Queensland, there’s no cooling-off period if a private sale contract is made within 48 hours of an auction that didn’t sell, or if the buyer was already a registered bidder at that auction.

It’s against the law for the seller or their agent to give buyers a price guide before the auction.

Sellers don’t have to set a reserve price (the lowest price they’ll accept), but if they do, it must be written down before the auction. The auctioneer doesn’t have to announce when bidding reaches that amount.

What Are The Auction Conditions?

Before an auction starts, everyone who wants to bid must register by giving the auctioneer their name, address, and proof of ID (like a driver’s licence or passport). Each registered bidder gets a numbered card, and only people with these cards can make bids.

Bidders are responsible for making sure their bids are seen and heard clearly. The highest bidder wins the property, as long as the reserve price (the seller’s minimum) has been met.

The auctioneer is in charge of the auction and can decide what happens if there’s any disagreement, like restarting the bidding or choosing which bid to accept. The auctioneer also decides how much each new bid must increase by.

Once you make a bid, you can’t take it back, and the auctioneer can refuse any bid if they wish. The seller can also place bids through the auctioneer or choose to withdraw the property at any time.

When the hammer falls, the highest bidder must sign the contract of sale and pay a 5% deposit (or a smaller amount if agreed). If the buyer refuses to sign, the auctioneer can legally sign the contract on their behalf.

The auctioneer isn’t responsible for any faults or mistakes in the property being sold.

If the property doesn’t sell (called “passed in”), the highest bidder gets first chance to negotiate with the seller right after the auction.

The auctioneer will also explain how GST (Goods and Services Tax) applies, either it’s included in the final bid price or added on top of it.

Notes:
Bidders should stand where the auctioneer can see them and make clear bids. They can ask reasonable questions at any time. The property is officially sold when the auctioneer signals the “fall of the hammer.”

Important Things To Know When Attending Queensland Auctions

Property auctions can be a fast and clear way to sell a home or land. They often attract investors, home buyers, and developers who are looking for good deals.

However, buyers should do their homework before the auction, learn about the property, understand the auction rules, and be ready to compete with other bidders.

Here are some important things to keep in mind:

Research The Value Of The Property

Before going to an auction, buyers should research how much the property is worth. You can do this by looking at data about the suburb and checking recent sales of similar homes in the area.

No Cooling Off Period

In Queensland, when you buy a property at an auction, there is no cooling-off period. This means you can’t change your mind or cancel the contract within the usual five business days.

The cooling-off period also doesn’t apply if you buy the property within two business days after an auction and you were one of the registered bidders at that auction.

It’s also against the law for the real estate agent to give you a price guide for a property being sold at auction.

Set A Budget And Secure Finance

If you need a loan to buy the property, it’s very important to have your finance approved before the auction. This is because auction sales are unconditional, once you win, you must go through with the purchase.

If you can’t pay the full amount on settlement day (after taking out the deposit), you’ll be breaking the contract, which means you could lose your deposit and might even have to pay extra costs.

Before the auction, buyers should set a budget and stick to it. Once the hammer falls, the highest bidder must buy the property. Be careful not to bid too high, banks usually won’t lend more than the property’s value.

Other Costs To Consider When Buying At Auction

It’s very important to set a budget for the auction and stick to it. When making your budget, remember to include all the extra costs that come with buying a property, not just the price of the home. It’s also smart to leave some extra money as a safety buffer in case unexpected expenses come up.

Some of the costs you should plan for include:

Finance

As mentioned earlier, buyers should get their loan pre-approved before they register to bid at an auction.

Deposit

The deposit amount is decided before the auction. Buyers should make sure they know how much the deposit is and be ready to transfer the money within the time stated in the contract of sale.

Stamp Duty

Stamp duty, also called transfer duty, is a tax you pay when a property is sold or transferred. The amount depends on how much the property is worth and whether you qualify for any discounts or concessions.

Stamp duty is usually paid when the sale is finalised, known as settlement.

Titles Registration Fee

The amount depends on how much the property costs. You can get an estimate by using Titles Queensland’s online fee calculator.

Building And Pest Reports

Since properties sold at auction are unconditional, it’s a very good idea to get a building and pest inspection before auction day. This way, you’ll know about any problems or damage in the property before you decide to bid.

Searches

It’s important to do checks on the property before you bid. This can include a title search, a land tax check, and other searches that help you learn more about the property you’re interested in.

Insurance

In Queensland, once you sign the contract, the property becomes your responsibility from the next business day. That’s why it’s important to arrange insurance right away after signing.

Auction Bidding Service

Property auctions are known for being fast and competitive, often filled with a mix of excitement, nerves, and energy.

Because you’re bidding against other buyers and don’t know the final sale price, the process can feel stressful, whether you’re a first-time buyer or someone who’s bought properties before.

That’s why some people choose to hire a professional to bid for them.

A professional bidder (sometimes called a buyer’s agent or auctioneer) is someone you hire to make bids for you during the auction. Their goal is to help you buy the property at the best price and terms possible.

Professional bidders usually have lots of experience with auctions. They know how to plan bidding strategies, negotiate, and understand the local property market.

They normally charge a fee or commission for their help, which you’ll agree on before the auction.

The Benefits

Expertise And Experience

Professional bidders know how auctions work and are skilled at negotiating with auctioneers and other buyers.

Their experience can give you an advantage and help you get the property at a fair price.

Emotional Distance

When you bid at an auction yourself, it’s easy to get caught up in the excitement and make quick decisions that could lead to paying too much for the property.

A professional bidder, however, stays calm and focused on getting the best possible price without letting emotions get in the way.

Negotiation Skills

Professional bidders are experienced negotiators who understand how the auction process works.

They know how to place bids wisely, read the competition, and negotiate with the seller or auctioneer, which helps them get the best possible result.

Save Time And Effort

Going to auctions and bidding on properties can take a lot of time and energy, especially if you already have a busy schedule.

A professional bidder can take care of everything for you, from registering to placing bids, so you can save time and avoid the stress.

Next Steps And Buying At Auction:

Buying a property at auction can be tricky because you might end up paying more than it’s worth. Auctions can get very competitive, with people trying to outbid each other and driving up the price.

Properties sold at auction are usually sold “as is,” which means you might not get to check everything properly or have any guarantees from the seller. This can make it hard to know the property’s true condition and value. And if you don’t win the auction, you could still lose money on things like inspection or legal fees.

To make the process safer and easier, you can work with Precision Property Buyers, our team of experienced buyer’s agents. We know the Queensland auction market well and can help you research properties carefully before bidding.

We can bid for you to help you avoid overpaying and share valuable insights about current market trends. Whether you’re buying your first home or adding to your investment portfolio, you can count on us to protect your interests and make the auction process smooth and stress-free. Get in touch with our team today!

FAQ

What Are Vendor Bids?

The seller (called the vendor) is allowed to make bids on their own property until the reserve price (the lowest price they’re willing to accept) is reached. It’s against the law for the seller to bid higher than that amount. The auctioneer must also tell everyone if a bid is made by the vendor.

What Are ‘Dummy Bids?’

A dummy bid is when the seller, or someone they know, like a friend, family member, or even the auctioneer, makes a fake bid to try to push the price higher. Dummy bidding is illegal in Queensland.

What Is The Auction Process?

Auctions have strict rules to make sure everything is fair for everyone.

People who want to bid must register first by giving their name, address, and proof of ID. Only registered bidders are allowed to make bids on auction day.

When the hammer falls, the property is officially sold, and the winning bidder must sign the contract right away.

What Is The Reserve Price?

The reserve price is the lowest amount the seller is willing to accept for their property at the auction. This amount is written down before the auction. The seller can choose not to set a reserve price if they prefer.

The auctioneer can tell buyers whether a reserve price has been set, but not what the amount is.

If no one bids at or above the reserve price, the property won’t be sold at the auction.