Victoria's auction rulebook: vendor bids, co-owners and dummy bidding

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Kooky

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A Victorian property auction lasts a few minutes, and most of what happens in those minutes is scripted by law. The person holding the gavel has to display certain documents, say certain things before the first bid, and treat each kind of bid in a set way. Buyers who know the script can tell a lawful vendor bid from an unlawful one. Sellers who know it understand what they may and may not do on their own footpath.

This guide sets out the full set of rules for a public auction of property in Victoria as Consumer Affairs Victoria, the state's regulator of estate agents, describes them on its pages for sellers and buyers. It covers the reserve price, the documents on display, the auctioneer's opening announcements, vendor bids, co-owner bids, dummy bidding, the auctioneer's powers during bidding, what "on the market" and "passed in" mean, and the contract, deposit and cooling-off position once the hammer has fallen.

One caution on dates. The regulator's page for sellers was last updated on 1 October 2026 and reflects the price transparency changes that began that day. Its page for buyers was last updated on 9 May 2021. Where the two differ, this guide follows the newer one and says so.

Consumer Affairs Victoria, pages on selling property by auction (last updated 1 October 2026) and buying property at auction (last updated 9 May 2021).

What a public auction is in Victoria

Consumer Affairs Victoria defines a property auction as a public sale that is advertised for a specific place, time and date. The property is offered to the highest bidder. An estate agent usually conducts the sale, acting as auctioneer. The pages read for this guide do not describe a separate accreditation for auctioneers in Victoria, and this guide does not state who may or may not conduct an auction beyond that description.

The detailed conduct rules sit in regulations. According to the regulator, the auction rules, the information sheet for bidders and the words the auctioneer must say are set out in the Schedules to the Sale of Land (Public Auctions) Regulations 2014.

There is also one fixed restriction in the calendar. Public auctions of land are banned in Victoria before 1 pm on Anzac Day, 25 April.

The reserve price, now published in advance

The reserve is the number the whole auction turns on. Consumer Affairs Victoria defines the seller's reserve price as the lowest price a seller will accept for a property sold at auction or by fixed-date sale.

The reserve is now published in advance. New property price transparency rules started in Victoria on 1 October 2026, and the regulator's page for sellers says the reserve price and sale price requirements apply to auctions and fixed-date sales held on and from 16 October 2026. Under those requirements an estate agent must publish the seller's reserve price at least 7 days before the auction or fixed-date sale.

The rule is a condition of the auction itself. The regulator states that an auction or fixed-date sale cannot proceed unless the reserve price has been published for the full 7-day period. Its guidance for estate agents gives the first case: for an auction scheduled for 16 October 2026, the reserve is due by 9 October 2026.

The same guidance for agents, last updated on 1 October 2026, describes the form the figure takes. The reserve must appear in all advertising and marketing material for the property, including the Property Price Statement, the document that replaces the Statement of Information. It must be a single dollar amount, with no softening words or symbols; the guidance gives "from", "over", "+" and "starting at" as examples of what may not accompany it.

Two points are not answered on the pages read. They do not say whether a reserve may be changed once it has been published, or what would follow if it were. They also give no penalty amount for a breach of the reserve rule. Both points are left open here.

The reserve sits alongside the older advertising limits, which remain. According to Consumer Affairs Victoria, an agent cannot advertise a property below the seller's asking price if one was given, below the agent's own estimated selling price, or below a price the seller has already rejected.

What must be on display before bidding starts

The first duty on auction day is a quiet one. The auction rules and an information sheet on Victorian auction laws must be displayed at least 30 minutes before the auction starts. The buyer page adds that they are displayed at the venue.

The display matters most for vendor and co-owner bids. The regulator says the arrangements for those bids must be set out in the rules displayed before the auction.

The contract is on display too, and the buyer page is direct about its effect: by bidding, a person accepts the contract terms on display and cannot negotiate them afterwards. It gives a longer settlement period as an example of a term that cannot be asked for once the hammer has fallen.

The property itself is usually open one last time. The regulator's pages say it may be open for inspection for at least half an hour before bidding starts on the day. The buyer page also notes that sellers or their agents must have the due diligence checklist available at open for inspections; it covers matters such as owners corporations, flood or fire risk and insurance for renovations.

What the auctioneer must announce

Before the first bid is called, the auctioneer has a list of things to say. Consumer Affairs Victoria sets them out on its page for sellers, and they fall into three groups.

The first group is about how the auction will run. The auctioneer must tell bidders that the auction will follow the auction rules, that bids cannot be accepted after the fall of the hammer, and that bidders will be identified on request.

The second group is a warning. The auctioneer must state that it is against the law to make a false bid, to hinder another bidder or to disrupt an auction intentionally, and that substantial penalties apply.

The third group is specific to the sale. The auctioneer must state whether vendor bids or co-owner bids will be made, and must state any additional conditions that apply to the auction.

The announcements also give bidders a right they can use later. Because bidders "will be identified on request", the buyer page says a person who is bidding may ask the auctioneer to indicate who else made a bid.

Vendor bids: the one lawful bid for the seller

A vendor bid is a bid made for the seller. Victoria allows it, in one form only. According to the regulator, a vendor bid can be made only by the auctioneer, it is made when the seller is not satisfied with the last bid, and the auctioneer must announce it as a vendor bid when it is made. The arrangement must also be in the rules displayed before the auction and announced at the start.

Everything outside that form is unlawful. The regulator states plainly that it is illegal for the seller to bid from the crowd to raise the price, and illegal for the seller to ask someone else to bid for them for that purpose. A relative or a friend placed among the bidders is not a vendor bid; it is a false bid.

The duty runs to the agent as well as the seller. The regulator's page on selling with or without an agent lists it among an agent's obligations: agents must disclose any vendor bids at auction. On the auctioneer's side, the buyer page says an auctioneer must not accept a bid they know was made by or for the seller unless it complies with the law and the vendor bid rules.

The pages read do not state a limit on the number of vendor bids at one auction, or say how a vendor bid may stand in relation to the published reserve. This guide does not fill those gaps.

Co-owner bids: a different rule for joint owners

Some auctions are held because the owners want to go separate ways, and one of them may wish to keep the property. Victoria's rules make room for that. Where a property is jointly owned, the regulator says, one or more co-owners who genuinely want to buy may bid.

The mechanics are the reverse of a vendor bid. A co-owner bids from the crowd, either personally or through a representative. A co-owner may not bid through the auctioneer. A vendor bid, by contrast, may come only from the auctioneer and never from the crowd.

The word that carries the weight is "genuinely". The permission is for a co-owner who wants to buy. A co-owner who bids only to push the price up is in the same position as any seller bidding from the crowd, which the regulator describes as illegal.

Disclosure applies here too. The co-owner arrangement must be in the displayed rules and announced by the auctioneer at the start, alongside any vendor bid arrangement.

Dummy bidding and the other auction offences

On dummy bids the regulator leaves no room. All dummy bids are illegal and attract significant penalties.

Its definition has two limbs. A dummy bid is a false bid made up by the auctioneer. It is also a bid the auctioneer accepts from a non-genuine bidder in the crowd. The buyer page adds the usual purpose: to influence the sale price.

The duties that follow are set out person by person.

• The auctioneer must not falsely acknowledge a bid where none was made, and must not accept a bid known to be made by or for the seller unless it complies with the law and the vendor bid rules.
• The agent must not make or accept dummy bids, and must not accept late bids after the hammer falls, according to the regulator's page on selling with or without an agent.
• The seller must not bid from the crowd to raise the price or ask another person to do so.
• Anyone who arranges for another person to make an unlawful bid commits an offence, the buyer page says.

The offences are not limited to false bids. The auctioneer's own opening statement names two more: hindering another bidder, and intentionally disrupting an auction.

On penalties, the regulator's consumer pages use the words "substantial" and "significant" and give no amounts. The dollar figures and the section numbers of the Sale of Land Act 1962 behind these offences were not read for this guide, so none are quoted.

The auctioneer's powers while bidding runs

The rules give the auctioneer real control over the bidding, and the regulator lists the powers plainly.

The auctioneer sets the size of each step. The buyer page calls these bid increments, also known as "rises" or "bidding advances". A bidder may offer a different amount, but the auctioneer decides whether to accept it.

The auctioneer may refuse a bid at any time, and the regulator adds that this includes the moment the hammer is falling. If a bid is disputed, the auctioneer has two options: resume at the last undisputed bid, or restart the bidding.

The auctioneer may also refer a bid to the seller at any time before the auction concludes, and may withdraw the property from sale at any time. The seller page describes the pause in which the auctioneer speaks privately with the seller as "going inside" or "seeking advice or instructions".

Against those powers, the crowd has two rights of its own. During the auction anyone may ask the auctioneer a reasonable number of questions about the property, the contract or the auction. The right belongs to anyone present, not only to those bidding. And a bidder may ask for the maker of a bid to be pointed out.

The one hard limit on the auctioneer's discretion is the hammer. Bids cannot be accepted after it falls, the auctioneer must say so at the start, and agents are told not to accept late bids.

On the market, or passed in

Every auction reaches a point where the seller has to decide. The regulator describes it this way: if bidding is close to the reserve or has reached it, the auctioneer asks whether the seller will sell. If the answer is yes, the property is announced as "on the market" and will go to the highest bidder.

Where the reserve is not met, the seller page says the auctioneer seeks more bids, and if it is still not met the property may be passed in or withdrawn.

A property is "passed in" when the bids do not meet the reserve or another price the seller will accept. The second half of that definition matters: a seller may decide on the day to accept less than the reserve, and the regulator's wording allows for it.

Passing in gives one person a right. The highest bidder has the first right to negotiate with the seller. The regulator says this holds even where the property was passed in on a vendor bid. If that negotiation fails, the buyer page says, the agent may approach other bidders, and if no buyer agrees on a price the seller may offer the property for private sale.

A worked example shows the sequence. The figures are illustrative, not market data. Assume a published reserve of A$900,000. Bidding from the crowd stops at A$850,000. The auctioneer, having announced at the start that vendor bids would be made, calls a vendor bid of A$870,000 and announces it as one. Nobody bids again and the property is passed in. The last bid called was the seller's own, yet the bidder at A$850,000 is the highest bidder and holds the first right to negotiate. The gap between that bid and the reserve is A$900,000 less A$850,000, or A$50,000, and that is the ground the negotiation has to cover.

The vendor bid leaves a trace afterwards. The buyer page says that if an agent advertises the property after the auction at the passed-in amount, the agent must disclose whether that amount was a vendor bid. In the example, an advertisement quoting A$870,000 would have to say that the figure was a vendor bid and not an offer from a buyer.

An unsold auction still has a cost. If the property does not sell, the regulator says, the seller generally pays the marketing expenses and the auctioneer's fee but not the agent's commission. The word "generally" is the regulator's: what a particular seller owes depends on the authority signed with the agent.

The contract and the deposit

The fall of the hammer is not the sale. According to Consumer Affairs Victoria, the property is sold when the seller and the successful bidder have both signed the contract of sale. Immediately after the auction the successful bidder is invited to sign, the seller accepts by signing, and each party receives a signed copy.

The buyer pays a deposit on signing. Victorian law sets no required amount, the buyer page says, but a deposit is usually 10 per cent of the purchase price. A partial deposit is possible only with the seller's agreement before the auction and a change to the contract, with the balance due on a set date.

The buyer page raises a practical point about bank cheques. A cheque drawn in advance is based on the price the buyer intends to pay, so a lower final price means the deposit is more than 10 per cent. A worked example, with illustrative figures: a buyer expecting to pay A$800,000 arrives with a bank cheque for A$80,000, which is 10 per cent of that sum. The hammer falls at A$760,000. Ten per cent of A$760,000 is A$76,000, so the cheque is A$4,000 more than a 10 per cent deposit and equals about 10.5 per cent of the price. The regulator's suggestion is to confirm the payment method with the agent before the auction.

The deposit does not go to the seller on the day. The agent, conveyancer or lawyer must hold it in a trust account until settlement, and it can be released to the seller earlier only if the buyer agrees. Where a seller has no agent, the buyer page gives two routes: the seller's lawyer or conveyancer holds the deposit in trust, or it is placed in a special purpose account at a Victorian authorised deposit-taking institution in the names of both seller and buyer. The regulator's guidance for agents records that the rules on early release of deposits are scheduled to change on 1 July 2027.

The sale price becomes public too. Once a sale becomes unconditional, the seller page says, agents must publish the final sale price in the Property Price Statement, which must be published online, free of charge, for at least 18 months. The guidance for agents puts the deadline for adding the sold price at 7 days after the property is unconditionally sold. A seller or a buyer, or an agent acting for either, can apply to Consumer Affairs Victoria for an exemption where family violence or personal violence is involved.

Offers before the auction, and no cooling-off

A buyer who signs at auction has no cooling-off period. The regulator states it without qualification, and it is the reason the checks a buyer would otherwise make afterwards have to be made before auction day.

In a private sale of residential or small rural property, a Victorian buyer ordinarily has three clear business days to cool off, according to the regulator's page on buying by private sale. An auction campaign removes that right inside the window around the auction, and the window catches some sales that never reach the auction itself.

The first is the pre-auction offer. If the seller agrees to consider offers, a buyer can make one through the agent before the auction, usually as a signed contract, and the negotiation follows the same process as a private sale. If the offer is accepted less than three clear business days before the auction date, the buyer does not get a cooling-off period. As an illustration, an offer accepted on the Thursday before a Saturday auction leaves a single business day, the Friday, before the auction date, which is fewer than three however the days are counted. How the count runs in a closer case depends on the dates, and is a question for the buyer's conveyancer or lawyer.

The second is the sale after a passed-in auction. Because the exclusion also covers the three clear business days after a public auction, a highest bidder who negotiates and signs in that period buys on the same footing as a buyer who signed under the hammer.

The published reserve now has a part in early offers. An auction cannot proceed unless the reserve has been published for the full 7 days, yet the regulator says a seller can accept a pre-auction offer without that period having run, provided the reserve was already published before the offer was made. A seller whose reserve has been public for only two days may therefore still accept an offer made on the third.

In Victoria the seller has one lawful voice in the bidding, the auctioneer's, and it has to be announced each time it is used.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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