Short answer: Winning at auction in Melbourne comes down to three things: preparation, understanding the process, and discipline on the day. Do your due diligence and get your finance sorted before you raise your hand, because a purchase at auction is unconditional. Know exactly how the auction will run and what the auctioneer is trying to do. Then set a firm limit, bid with confidence, and be willing to walk away. If the stakes are high or the emotion is real, the alternative is to have a professional bid for you, which is exactly what we do for our clients.
Buying your own home is emotional, and auctions are designed to use that. Our director, Lou Lihari, spent years on the other side as a selling agent and auctioneer, calling auctions and coaching vendors, so this guide is written from someone who knows how the room is worked, and how to protect a buyer in it.
How does buying at auction work in Victoria?
The most important thing to understand is that a purchase at a public auction is unconditional and binding from the fall of the hammer. There is no cooling-off period and no subject-to-finance clause, which is different from a private sale, where you get three clear business days to change your mind. That also applies if you sign a contract within three business days before or after the auction. In other words, once the hammer falls, the home is yours and the contract is locked in, so everything that protects you has to be done beforehand. You can confirm the detail on Consumer Affairs Victoria.
On the day, you will usually need to pay a deposit, typically ten per cent of the purchase price, on the fall of the hammer, with the balance due at settlement. The vendor sets a reserve, which is the minimum they will accept. The auctioneer can make vendor bids on the seller’s behalf as long as they are announced. If bidding does not reach the reserve, the property is “passed in”, and the highest bidder usually gets the first right to negotiate.
How do you prepare before auction day?
Because auction contracts are unconditional, preparation is where auctions are actually won. Before you bid, you want four things locked down. Have the contract and Section 32 vendor statement reviewed by your conveyancer or solicitor. Get a building and pest inspection so you are not buying someone else’s problem. Have your finance confirmed, ideally to the point where you can bid without a finance clause holding you back. And do your own pricing work on comparable sales so you know what the home is genuinely worth, not just what the price guide says.
Then set your limit, and write it down. The number you decide on in the calm of your kitchen is far more reliable than the number you will feel comfortable with in the heat of the auction. This is the single most useful thing an emotional buyer can do.
What bidding strategies actually work?
There is no single trick, but a few things consistently help. Bid with confidence and in clear, deliberate increments, rather than small, hesitant ones, because confident bidding can unsettle other buyers. A strong opening bid can set the tone and shorten the contest. Control your own increments where you can, instead of letting the auctioneer dictate the jumps. And watch the auctioneer’s cues, the pauses, the “any more bids”, the final calls, because they are all part of building momentum.
This is where Lou’s background matters. Having stood at the front and called auctions himself, he knows the auctioneer’s playbook from the inside: how they read the crowd, how they use vendor bids and silence to create pressure, and when a property is genuinely about to sell versus when there is room to move. Knowing what the person on the rostrum is doing takes a lot of the intimidation out of it.
What happens if a property passes in?
In 2026’s market, this matters more than usual. Melbourne’s auction clearance rate has been running well below last year’s: in the week to 11 July 2026 it was 60.2 per cent, up from 57.5 per cent the week before, but still a long way short of the 72.8 per cent recorded in the same week a year earlier. The inner east was softer again, at 47.8 per cent for that week. In practical terms, more homes are passing in than a year ago. When a property passes in, the highest bidder ordinarily gets the first right to negotiate with the vendor, often on the spot. For a prepared buyer, that can be a genuine opportunity to secure the home at a sensible price without a bidding war. We wrote more about that in our guide on what happens when a property passes in at auction.
The mistakes emotional buyers make at auction
Buying your own home is not a transaction, it is personal, and that is exactly the risk. The most common mistake is bidding past your limit because you have already imagined living there. Close behind it are showing your eagerness too openly, arriving without a clear plan for how and when you will bid, and skipping the due diligence because you have fallen for the place. Every one of these is avoidable, and every one of them costs money. The buyers who do best are the ones who treat the home they love with a cool head on the day.
What we bring from the other side of the rostrum
LP Advisory is a boutique, family-run firm, and between us we have sat on both sides of the auction. Lou’s years as a selling agent and auctioneer mean he understands how vendors and their agents think, price and position a property, and how an auction is choreographed to get the highest result for the seller. We now use that same knowledge in the opposite direction, for the buyer. When we bid for a client, we do it without emotion, to a clear strategy and a firm limit, and we read the room the way the auctioneer does. It is the difference between hoping the day goes well and controlling how it does.
If you would rather not stand in the crowd on auction day, our auction bidding and negotiation service puts a former auctioneer in your corner, and our full-service buyers advocacy covers everything from the search through to the winning bid.
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Frequently asked questions
Is there a cooling-off period when you buy at auction in Victoria?
No. A purchase at a public auction is unconditional and binding from the fall of the hammer, with no cooling-off period and no subject-to-finance protection. This also applies if you sign a contract within three business days before or after the auction.
How much deposit do you need at a Melbourne auction?
Usually ten per cent of the purchase price, payable on the fall of the hammer, with the balance due at settlement. In some cases a different deposit can be arranged with the agent before the auction.
What happens if a property is passed in at auction?
If bidding does not reach the reserve, the property is passed in and the highest bidder generally gets the first right to negotiate with the vendor. In a softer market with more properties passing in, this can be a real opportunity for prepared buyers.
Should I bid myself or use a buyer’s advocate?
Both can work. The advantage of a buyer’s advocate is unemotional bidding to a set strategy and limit, and someone who understands the auctioneer’s tactics from experience. It is particularly valuable for the home you really want, where emotion is hardest to control.
What is the biggest mistake buyers make at auction?
Bidding past their limit in the heat of the moment. Setting a firm limit in advance, in writing, and doing the due diligence beforehand are what stop an emotional purchase from becoming an expensive one.
