Offers & auctions
Private-sale offers, conditions, deposits, auction rules, vendor and dummy bids, passed-in properties, underquoting and the Statement of Information behind the Making an Offer and Buying at Auction hub. Every figure is drawn from this graph of claims, each traced to a specific, actually-fetched government or regulator source. This page is generated directly from that graph, not maintained separately from it. See the full knowledge base for other subjects.
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Consumer Affairs Victoria
Active claims (33)
Every claim in this subject currently powering a guide, with its confidence and last verification date.
Agents may advertise a single price or a range of up to 10%, must not use qualifying words or symbols such as 'offers above', 'from' or '+', and must not advertise below the estimated selling price, the seller's asking price, or a written offer the seller has already rejected. Online advertising must be updated within 1 business day of a relevant price change.
Before bidding starts, the auctioneer must tell bidders that bids will not be accepted after the fall of the hammer, that bidders will be identified on request, that false bidding or disrupting an auction is illegal, and whether vendor or co-owner bids will occur.
An auctioneer may refuse a bid at any time, including during the fall of the hammer, resume bidding at the last undisputed bid or restart it after a disputed bid, refer a bid to the seller at any time before the auction concludes, or withdraw the property from sale at any time.
The auctioneer sets the amount by which bids increase (called 'rises' or 'bidding advances'); a bidder may offer an alternative amount, but it is up to the auctioneer whether to accept it.
When a property is jointly owned, one or more genuinely interested co-owners may bid themselves or through a representative from the crowd, but not through the auctioneer.
Victorian law sets no required auction deposit amount, but it is usually 10% of the purchase price. A buyer who pays less than they were prepared to for the winning bid will find their prepared deposit is more than 10% of the actual sale price.
A post-auction deposit must be held in trust by the seller's estate agent, conveyancer or legal practitioner until settlement, and can only be released to the seller before settlement if the buyer agrees. A seller without an agent must deposit it with their own legal practitioner/conveyancer or into a special purpose account held in both parties' names.
Dummy bidding — a false bid invented by the auctioneer, or a bid accepted from a non-genuine bidder to influence the sale price — is illegal and attracts significant penalties. An auctioneer must not knowingly accept a bid made by or for the seller outside the vendor-bid rules, or falsely acknowledge a bid that was never made.
A buyer cannot make an auction contract subject to further conditions — such as obtaining finance or a longer settlement period — unless the seller agrees to them.
There is no cooling-off period for a property bought at auction in Victoria. If a pre-auction offer is accepted less than three clear business days before the scheduled auction, the buyer also forfeits the cooling-off period.
'On the market' means the auctioneer has confirmed with the seller that the property will sell to the highest bidder, after bidding has reached or is close to the reserve price. Before that point the auctioneer may pause the auction to seek the seller's instructions.
If bidding does not meet the seller's reserve, the property is 'passed in'. The highest bidder then gets first right to negotiate a price with the seller; if they cannot agree, the agent may approach another bidder, and if no buyer agrees a price the property may go to private sale. If the agent later advertises at the passed-in amount, they must disclose whether it was a vendor bid.
There is no legally binding contract at auction until both buyer and seller have signed the contract of sale in the same terms as displayed before bidding; a successful bidder cannot add further conditions (such as finance or a longer settlement) unless the seller agrees, and there is no cooling-off period once the contract and deposit are in place.
The auction rules and the auction information statement setting out Victoria's auction laws must be displayed at the auction location for at least 30 minutes before the auction starts.
A vendor bid is made on behalf of the seller when the seller is not satisfied with the last bid. It can only be made by the auctioneer and must be announced when made; vendor and co-owner bid arrangements must be set out in the auction rules displayed before the auction and announced by the auctioneer at its start.
To count as comparable for underquoting purposes, a property must be of similar standard or condition to the property for sale and, in the Melbourne metropolitan area, sold in the last 6 months within 2km — or outside metro Melbourne, sold in the last 18 months within 5km.
Sellers, or the estate agent acting for them, must make Consumer Affairs Victoria's due diligence checklist available to prospective buyers at open-for-inspections.
An agent's estimated selling price must be reasonable and take into account the sale prices of the 3 properties the agent considers most comparable. If it later ceases to be reasonable, the agent must inform the seller in writing and update the sales authority and advertising.
Agents must pass on all verbal and written offers to the seller unless the seller has instructed them otherwise in writing. If instructed not to submit pre-auction offers to the seller, the agent must tell prospective buyers that their offer will not be submitted.
An advertised or estimated price is a guide only and can change while a property is on the market. A property selling for more than its advertised price does not necessarily mean underquoting occurred — competing buyers bidding against each other can also push the price up.
A private-sale buyer can negotiate conditions such as loan approval ('subject to finance', naming the lender), the sale of an existing property, or a satisfactory building or pest inspection. An auction buyer cannot add such conditions without the seller's agreement.
A private-sale contract of sale should state the property and party details, the offered price, the deposit amount, the balance owing at settlement, the agreed settlement period, any conditions, and the items included in the sale — an item left off the contract can be hard to claim ownership of at settlement.
A private-sale deposit is held in trust by the agent or the parties' conveyancer/legal practitioner until settlement. It can only be released to the seller before settlement if the contract is unconditional, the buyer is satisfied with the proof-of-debts information provided, and not until 28 days after the contract was signed.
GST applies to the purchase of new homes but not established homes, unless the seller is GST-registered; the contract must state clearly whether the price includes or excludes GST.
In an agent-managed private sale, a buyer makes an offer by signing the contract of sale, which the agent takes to the seller unless instructed not to. Consumer Affairs Victoria recommends writing an expiry date for the offer into the contract so the buyer knows by when the seller must have accepted it.
Private-sale 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 30–90 days) and which items are included in or excluded from the sale.
If a seller rejects a written offer because it is too low, the agent must update the indicative selling price and any advertised price that is lower than the rejected offer — but not if the offer was rejected for a different reason, such as unacceptable terms.
The lowest price a seller will accept is called the reserve price at auction, or the asking price in a private sale. It can differ from the agent's estimated selling price, a seller need not disclose it to their agent during the campaign, and an auction reserve is usually only set on the day itself — it may end up higher than the advertised price.
A Statement of Information must be displayed at every open for inspection, included with online advertising, given to a prospective buyer within 2 business days of a request, and updated whenever the indicative selling price changes.
The indicative selling price in a Statement of Information must not be less than the agent's estimated selling price, the seller's asking price, or a price in a written offer the seller has already rejected.
A Statement of Information must be prepared for every residential property an agent is engaged to sell, whether or not it is advertised. It must include an indicative selling price (a single figure or a range of up to 10%), details of the 3 most comparable property sales (or a statement that fewer than 3 comparable sales exist), and the suburb's median house or unit price, covering a period of 3–12 months and no more than 6 months old.
An agent who breaches Victoria's underquoting laws risks a penalty of more than $48,842 (240 penalty units) and forfeiture of their sale commission.
For pre-auction offer purposes, a written offer is any written format that states, at minimum, the price the prospective buyer is offering and any other terms being proposed — not only an offer made through a signed contract of sale.
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