Making an offer
The complete guide to making an offer and buying at auction
Price versus terms, private sale versus auction, conditions, deposits, negotiation, and what happens after your offer or bid is accepted.
- A private-sale offer is usually made by signing the contract of sale; an auction bid isn't binding until the contract is signed and the deposit paid.
- Price and terms are separate — a higher unconditional offer and a lower conditional one aren't directly comparable.
- Auction contracts can't be made conditional and carry no cooling-off, so preparation has to happen before auction day.
- Vendor bids must be made and announced by the auctioneer; dummy bidding is illegal.
- A passed-in property's price is not a verified market value.
What an offer legally represents
In an agent-managed private sale, you make an offer by signing the contract of sale, which the agent takes to the seller unless instructed not to (Consumer Affairs Victoria, verified 30 Jul 2026). For pre-auction-offer purposes, a written offer can be any written format that states at minimum the price offered and any other proposed terms — not only a signed contract (Consumer Affairs Victoria, verified 30 Jul 2026). At auction, your bid is not itself the offer: if you're the successful bidder you're offered a contract in the terms displayed before bidding, and the sale only becomes binding once both parties sign it and the deposit is paid.
Price and terms are not the same thing
A private-sale buyer can negotiate conditions — approval for a loan ("subject to finance", naming the lender), the sale of an existing property, or a satisfactory building or pest inspection (Consumer Affairs Victoria, verified 30 Jul 2026). A higher unconditional price and a lower conditional price aren't directly comparable — a seller may reject a higher offer because of its conditions, just as they may reject a lower one because of its price. At auction, you cannot add conditions such as finance or a longer settlement unless the seller specifically agrees (Consumer Affairs Victoria, verified 30 Jul 2026), which is exactly why auction preparation has to happen before bidding, not after.
Negotiating a private-sale offer
Negotiation can involve verbal offers — only a written offer can lead to a binding contract — more than one buyer making an offer, and agreement on a settlement period (commonly 30 to 90 days) and which items are included in or excluded from the sale (Consumer Affairs Victoria, verified 30 Jul 2026). CAV recommends writing an expiry date for your offer into the contract, so you know by when the seller must have accepted it (Consumer Affairs Victoria, verified 30 Jul 2026). The contract of sale itself should state the property and party details, the price offered, the deposit amount, the balance owing at settlement, the settlement period, any conditions, and the items included in the sale — anything left off is hard to claim at settlement (Consumer Affairs Victoria, verified 30 Jul 2026).
The deposit
A private-sale deposit is held in trust by the agent or the parties' conveyancer until settlement, and can only be released to the seller early if the contract is unconditional, the buyer is satisfied with proof-of-debts information, and 28 days have passed since signing (Consumer Affairs Victoria, verified 30 Jul 2026). There is no legal minimum or maximum auction deposit, but 10% of the purchase price is the common figure; a buyer who brings a cheque prepared for a higher amount than they end up paying will find it represents more than 10% of the actual sale price (Consumer Affairs Victoria, verified 30 Jul 2026). Either way, the deposit must be held in trust — by the agent, a conveyancer or a legal practitioner — until settlement (Consumer Affairs Victoria, verified 30 Jul 2026).
GST
GST applies to new homes but not established homes, unless the seller is GST-registered; the contract must clearly state whether the price includes or excludes GST (Consumer Affairs Victoria, verified 30 Jul 2026). If you're unsure whether it applies, this is a question for your conveyancer before you sign, not after.
Auction rules that shape how you bid
A vendor bid — made on the seller's behalf when they're not satisfied with the last bid — can only be made and must be announced by the auctioneer, and the arrangements for it must be set out in the displayed auction rules and announced at the start of the auction (Consumer Affairs Victoria, verified 30 Jul 2026). Dummy bidding — a false bid invented by the auctioneer, or one accepted from a non-genuine bidder to influence the price — is illegal and carries significant penalties (Consumer Affairs Victoria, verified 30 Jul 2026). "On the market" means the auctioneer has confirmed with the seller that the property will sell to the highest bidder, once bidding has reached or is close to the reserve (Consumer Affairs Victoria, verified 30 Jul 2026).
If the property is passed in
If bidding doesn't reach the reserve, the property is passed in and the highest bidder gets first right to negotiate a price with the seller; if they can't agree, the agent may approach another bidder, and if no buyer agrees a price the seller may take it to private sale (Consumer Affairs Victoria, verified 30 Jul 2026). A passed-in amount is not a verified market value — treat it the same way you'd treat any other unverified agent statement, and re-check your own limit rather than anchoring to it.
Auction preparation happens before auction day
There is no cooling-off period for a property bought at auction, and a pre-auction offer accepted less than three clear business days before the scheduled auction also loses cooling-off protection (Consumer Affairs Victoria, verified 30 Jul 2026). Sellers, or their agent, must make Consumer Affairs Victoria's due diligence checklist available to prospective buyers at open-for-inspections (Consumer Affairs Victoria, verified 30 Jul 2026) — work through it, and your own due diligence, before the auction, because there is no second chance after the hammer falls.
Worked example
A buyer has a $780,000 purchase ceiling (all-in, including duty and fees) and finds a townhouse listed with a Statement of Information indicative price of $700,000–$750,000. They complete their building inspection and due diligence before the auction, confirm their finance is genuinely ready to settle, and set a fixed walk-away bid of $760,000 — below their ceiling, to leave a buffer. At the auction, bidding reaches $745,000 and the auctioneer says the property is "on the market". They bid up to their pre-set $760,000 limit and stop; the property sells to another bidder for $772,000. Because the limit was fixed before the auction and never revised upward during bidding, walking away at $760,000 was the plan working as intended, not a loss.
Practical checklist
Before you make an offer or bid
- Set your purchase ceiling before you start negotiating, not during
- Complete your building/pest inspection and due diligence in advance
- Confirm your finance is genuinely ready to settle, not just pre-approved
- Decide which conditions matter most to you before you're under pressure to drop them
- Record agent statements as unverified, not as facts
Relevant Delora tool
Questions for a professional
- Does this draft contract reflect the price and conditions I've actually agreed?
- Is my finance approval genuinely unconditional and ready to settle on this timeline?
- Does GST apply to this purchase, and does the contract state that correctly?
Official resources
- Consumer Affairs Victoria: Buying property by private sale
- Consumer Affairs Victoria: Buying property at auction
Sources and methodology
- Buying property by private sale — Consumer Affairs Victoria (retrieved 30 Jul 2026)
- Buying property at auction — Consumer Affairs Victoria (retrieved 30 Jul 2026)
- Underquoting information for real estate agents — Consumer Affairs Victoria (retrieved 30 Jul 2026)
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.