Buying at auction and the cooling-off period
Winning a property at auction commits you on the spot: you sign the contract and pay the deposit, usually 10%, with no cooling-off period and no finance or inspection conditions, in every state. A private treaty purchase comes with a cooling-off period in most states, at a small cost to withdraw. This guide sets out each state's published rules and penalties, explains why the finance work has to be done before auction day, and covers what happens when a property is passed in.
- At auction the highest bidder signs and pays the deposit on the spot, usually 10%, with no cooling-off period (NSW Government); Victoria and NSW also exclude contracts exchanged around auction day
- Private treaty cooling-off: NSW 5 business days at 0.25%; Queensland 5 business days at up to 0.25%; Victoria 3 clear business days at $100 or 0.2%; ACT usually 5 business days; NT 4 business days, no penalty; SA 2 clear business days from the Form 1
- No mandatory cooling-off in Western Australia; in Tasmania only if the contract includes it as an option
- Before you bid: written pre-approval, an upfront valuation of the property if the lender allows, building and pest, strata search, the deposit ready
- Cooling-off can be waived, shortened or extended by agreement in NSW, Queensland and the NT; NSW uses a 66W certificate
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
What happens when the hammer falls
NSW's guide describes it: buying at auction is very different to other purchases, the bidding is public, and if the hammer falls and you are the highest bidder you must sign the contract right there and then and pay the deposit, usually 10% of the purchase price, on the spot. Bidders register with the agent beforehand and get a number; the vendor sets a reserve that is usually not disclosed; and the contract you sign is the one on display before the auction, unconditional. Consumer Affairs Victoria adds that you cannot put conditions on the contract, for example a longer settlement, without the seller's agreement. There is no finance clause, no inspection clause and no cooling-off period, so the buyer's protection is everything done before the day.
Cooling-off periods by state
For private treaty purchases, from each state's published guidance, checked on 20 September 2026. Business days exclude weekends and public holidays; "clear" days exclude the day the period starts. Rules change, so confirm with your conveyancer for the contract in front of you.
| State or territory | Cooling-off period (private treaty) | Cost to withdraw | At auction | Source |
|---|---|---|---|---|
| New South Wales | 5 business days from exchange, ending 5pm on the fifth business day | 0.25% of the purchase price ($250 per $100,000) | None; also none if contracts are exchanged the same day after the property is passed in; waivable by 66W certificate | NSW Government |
| Victoria | 3 clear business days from the day you sign, for residential and small rural property | Full refund less $100 or 0.2% of the price, whichever is greater | None, and none within 3 clear business days before or after a public auction | Consumer Affairs Victoria |
| Queensland | 5 business days from the day you receive the signed contract, ending 5pm on the fifth day | Seller may deduct a penalty of up to 0.25% of the price; deposit refunded within 14 days | None; buyer can waive or shorten in writing | Queensland Government |
| Australian Capital Territory | Usually 5 business days, extendable by agreement | Usually 0.25% of the agreed price forfeited | None | Civil Law (Sale of Residential Property) Act 2003; conveyancers' published guides |
| South Australia | 2 clear business days from service of the vendor's Form 1 disclosure statement | Any deposit paid over $100 must be refunded | None; read the Form 1 before auction | Legal Services Commission of SA handbook |
| Northern Territory | 4 business days from the day the contract is last signed and exchanged | None; cancel without penalty or explanation | None; may be waived, reduced or extended by agreement | NT Government |
| Western Australia | No mandatory cooling-off period | — | None | Consumer Protection WA |
| Tasmania | Only if the parties include it as an option in the standard contract | As set in the contract | None | Consumer, Building and Occupational Services Tasmania |
Auction or private treaty: what changes for your finance
| Protection | Private treaty | Auction |
|---|---|---|
| Finance clause (subject to loan approval) | Usually available; the contract is cancelled if finance is declined | Not available; the contract is unconditional |
| Inspection clause (building and pest, strata) | Usually available in Queensland; done inside cooling-off elsewhere | Not available; inspect before the day |
| Cooling-off | 2 to 5 business days in most states, at 0% to 0.25% | None |
| Valuation risk | If the bank values low, the finance clause or cooling-off is the exit | A winning bid above the valuation is a cash shortfall you must fund |
| Deposit on signing | Often a smaller holding deposit, then the balance at exchange | Usually 10% on the spot, as cash, bank cheque or an agreed deposit bond |
What to do before auction day
Five things, in order. A written pre-approval with a limit that includes the costs. A check of the specific property: a broker can ask the lender for an upfront valuation before the auction where the lender offers it, and otherwise read the comparable sales, because the bank valuation after a competitive auction is where deals fail. The building and pest inspection and, for a strata property, the strata records search. The contract reviewed by your conveyancer, with any changes negotiated before the day since none are possible after; and the deposit arranged, as cash, a bank cheque or a deposit bond the agent has agreed to accept. Then a limit: the price at which the loan stays inside the pre-approval and the valuation, written down and not exceeded.
Passed in, and post-auction negotiation
If bidding stops below the reserve the property is passed in and the highest bidder usually gets the first right to negotiate. NSW publishes that there is still no cooling-off period if contracts are exchanged on the same day as the auction after the property has been passed in, and Victoria excludes contracts made within three clear business days before or after an auction, so a same-day deal is as unconditional as a winning bid. If you want conditions or a cooling-off period, wait out those days and buy by private treaty with the finance and inspection clauses in. A broker keeps the pre-approval and the valuation current through that week, and Your Finance Guide refers you to one licensed broker partner for that; we do not lend, bid or give legal advice.
Before you bid
Approval, valuation, deposit and inspections.
Auction and cooling-off FAQs
Can you back out of an auction purchase?
Is there a cooling-off period when you buy a house?
Do auctions in Victoria have cooling-off periods?
What does it cost to cool off?
How do I protect my finance before an auction?
What is private treaty?
What if the property is passed in?
Can I waive or shorten a cooling-off period?
Bid with the finance already done
Tell us the property and the auction date, and we refer you to one licensed broker partner who sets the pre-approval, checks the valuation risk and arranges the deposit before the hammer falls. Free for borrowers, no obligation.