Buying at auction vs private sale in Victoria: what's different legally?

The property looks the same on the listing. The price guide reads the same. The contract is (mostly) the same. But the moment you sign, the legal protections you have as a buyer are very different depending on whether the property is sold at auction or by private sale.

If you only take one thing from this article, take this: at auction, the contract is unconditional and you cannot cool off. In a private sale, you usually can. That single difference changes everything about how you should prepare.

Here's what actually changes between the two methods, and what it means in practice for buyers in Victoria.

The cooling-off period only applies to private sales

In Victoria, section 31 of the Sale of Land Act 1962 (Vic) gives buyers of residential property three clear business days after signing the contract to change their mind. If you cancel inside that window, you forfeit either $100 or 0.2% of the purchase price (whichever is greater) and the rest of any deposit is refunded.

That right does not apply to auctions. Section 31 specifically excludes any contract signed at a publicly advertised auction, or within three clear business days before or after that auction. So if you bid at the auction, sign on the bonnet of a car after the hammer falls, or sign three days later under the same terms, you have no cooling-off right.

The same rule applies to land used mainly for industrial or commercial purposes, and to farming land over 20 hectares. For typical residential purchases, the auction exclusion is the one that catches buyers out.

In practice, this means: at auction, you sign a binding contract on the day with no get-out clause. In a private sale, you usually have a short window to walk away.

For a fuller breakdown of how cooling-off works (including the few situations where you lose the right even in a private sale), see our cooling-off period guide.

Conditions: negotiated in private, fixed at auction

The other big legal difference sits inside the contract itself.

In a private sale, the contract is open to negotiation before you sign. Buyers commonly negotiate special conditions like:

• Subject to finance approval

• Subject to a satisfactory building and pest inspection

• A specific settlement date

• A longer or shorter deposit period

These conditions become part of the contract. If a condition isn't satisfied, you generally have a right to end the contract and recover your deposit. We've covered the finance condition specifically in our subject to finance guide.

At auction, the contract is presented as a take-it-or-leave-it document before bidding starts. Once the auctioneer's hammer falls, you sign the contract that was on display. There is no opportunity to add a finance clause, an inspection clause, or any other special condition. The contract is unconditional.

This is why pre-auction preparation matters so much. Anything you would normally make conditional in a private sale (finance, inspections, advice on the contract) needs to be sorted before you bid. Our pre-auction due diligence guide walks through what to do in the lead-up.

Deposit and signing on the day

At a Victorian auction, the successful bidder is generally expected to sign the contract immediately and pay the deposit on the day. The standard deposit under the LIV/REIV Contract of Sale is 10% of the purchase price, although a smaller deposit can be agreed in advance with the vendor's agent.

In a private sale, the deposit is still typically 10%, but the timing is more flexible. It is often paid when you sign, or within a few days, depending on what the contract says.

If you can't put a full 10% on the table on auction day, you need to talk to the agent before the auction starts. Some vendors will accept a 5% deposit, or a deposit bond, but you can't assume it. Turning up without the funds and trying to negotiate after winning the bid is not a position you want to be in.

Auction-specific rules buyers should know

A few rules sit outside the contract but shape how Victorian auctions work in practice.

Vendor bids are allowed but must be disclosed. The auctioneer can make bids on behalf of the vendor (up to the reserve price), but those bids must be clearly identified as vendor bids when they are made. Dummy bidding (bids made by people who aren't really intending to buy, on the vendor's behalf) is prohibited.

Underquoting is illegal. Agents are not permitted to advertise a price that is less than the vendor's reserve, the agent's own estimated selling price, or any genuine offer already rejected.

Reserve price disclosure is changing. The Victorian Government announced in November 2025 that legislation would be introduced in 2026 to require agents to publish the reserve price at least seven days before an auction, with no changes permitted afterwards. This is intended to make price guides more honest and let buyers decide whether the property is in their range before they spend on inspections and legal advice. As at the date of this article, no legislation has been introduced.

Which method carries more risk for the buyer?

Auction. By a wide margin. You sign an unconditional contract on the day with no cooling-off, no finance condition, no inspection condition, and no real chance to renegotiate.

That doesn't mean auctions are bad. Plenty of properties in Victoria are sold by auction, and buyers do well at them every weekend. The point is that the risk profile is different, and the preparation needs to match it.

If you are bidding at an auction, the work that a buyer in a private sale can do between signing and the end of the cooling-off period needs to be done before you bid. That includes:

• Final loan approval (not just pre-approval) to the level you intend to bid

• A full Section 32 and contract review by your lawyer

• Building and pest inspections

• A clear understanding of any special conditions in the contract

• Confirmation of how much deposit you can pay on the day

In a private sale, the same checks still matter, but you have a short safety net if something goes wrong in those first three business days.

How a lawyer fits in (in either case)

Whether you are bidding at auction or signing a private sale contract, having the contract and Section 32 reviewed by a lawyer before you commit is the single most useful thing you can do.

For private sales, that review can result in negotiated changes to the contract before you sign. We can ask for a longer settlement, a smaller deposit, a finance condition, or amendments to special conditions that don't sit well.

For auctions, the review is your one shot. Once the hammer falls, the contract is fixed, so the review needs to happen during the campaign and you need to act on the advice before auction day.

We offer a free contract review for both situations. If the property is going to auction, we'll prioritise the turnaround so you have advice before the day.

Send your contract for a free same-day review

This article provides general information about Victorian property law. It's not a substitute for legal advice on your specific situation. If you'd like to discuss your circumstances, get in touch.