Selling Property At Auction? – Pros/Cons & Tips [2025]

Selling your home is one of the biggest financial decisions you’ll ever make and choosing how to sell can greatly affect your final sale price. One of the most popular methods across Australia is selling property at auction.

An auction can be fast, competitive, and emotional. Done well, it can drive up the sale price through live bidding. But it also comes with rules, costs, and risks that every seller should understand before committing.

This 2025 guide breaks down everything you need to know about selling your house at auction in Australia from how it works and what auction fees to expect, to insider tips that help you get the best result possible. Whether you’re selling in Sydney, Brisbane, Perth or regional areas, this guide will make sure you feel confident on auction day.

Next Step: If you want information straight from the source, real estate agents would be more than happy to recommend a method of selling that they feel suitable for your property. Compare top Agents here.

How Does Selling By Auction Work?

Selling your property at auction is a structured process that’s regulated by each state and territory. Here’s a step-by-step overview of how it typically works:

1. Appoint a real estate agent and auctioneer.
   Choose an experienced agent who has a proven track record with auction sales. They’ll guide you through the marketing, pricing, and legal requirements. In most states, your agent will also act as your auctioneer or will work closely with one. If you’re looking for an agent, you can start your search here.
2. Prepare your home.
   Presentation is key. Professional photography, small repairs, and home styling can make a huge difference in attracting bidders. Clean, declutter, and ensure your home’s best features shine.
3. Market the property.
   Auction campaigns usually run for 3–5 weeks. During this time, your property will be advertised online (on sites like realestate.com.au and Domain), through social media, print ads, and open homes. The goal is to generate maximum interest and create competition before auction day.
4. Set your reserve price.
   Your reserve price is the minimum amount you’re willing to sell for. It’s confidential between you and your agent. We’ll explain more about this next.
5. Auction day.
   On auction day, registered buyers gather to place bids. The auctioneer calls out bids, and if the final bid meets or exceeds your reserve price, your property is officially sold under the hammer. If it doesn’t, the property may be passed in (more on this below).
6. Contract and deposit.
   Once the hammer falls, the winning bidder must sign the contract and pay the deposit immediately, usually 10% of the purchase price. Unlike private sales, there’s no cooling-off period after an auction sale (except in limited circumstances in some states).

The above seems straightforward enough but we’re well aware that there are some other questions that might still be lingering for you so have also taken the time to answer some of these below.

How Is My Reserve Price Decided?

Often with assistance from their auctioneer, the seller will firstly look to an appraisal on their home and then perform additional research into similar sales within the area to establish their estimated market value. This mixed with a figure they feel 100% comfortable selling at will determine their reserve price.

Here’s how most sellers work it out:

• Get a professional appraisal from your agent. They’ll assess your home’s value based on recent comparable sales.
• Study local market trends. Use CoreLogic and Domain reports to see how similar homes are performing in your suburb.
• Balance market data with comfort. Your reserve should reflect fair market value but also be an amount you’re genuinely comfortable selling at.

Once set, the reserve price stays confidential between you and your agent. This prevents buyers from anchoring their bids too low.

What Happens If My House Is Sold At Auction?

If your home sells at auction, congratulations, you’ve just achieved one of the fastest and most transparent property transactions in Australia.

Here’s what happens next:

• The winning bidder signs the contract of sale immediately.
  There’s no cooling-off period, so once the gavel falls, the sale is legally binding.
• They pay the deposit (usually 10%).
  This is typically held in the agent’s trust account until settlement.
• Settlement period begins.
  Settlement usually occurs 30–90 days after auction day, depending on what’s agreed upon in the contract.
• Your agent finalises all paperwork.
  They’ll coordinate with your conveyancer or solicitor to ensure the sale proceeds smoothly.
• You celebrate your sale!

What Happens If My House Doesn’t Sell At Auction?

If your reserve price isn’t met and therefore the property doesn’t sell on auction day, the auctioneer may declare the property a ‘pass in‘ and means, that the highest bidder receives the first right to negotiate with the seller. If you cannot reach a sale or the reserve is not met, you generally look to discuss options for re-advertising and marketing the property with the agent or consider listing for sale at an agreed price. The agent will follow up with any interested buyers to post the auction result which may also re-generate interest from any buyers that were unable to attend the auction.

How Much Are Auction Fees?

There are a few pieces of the puzzle to consider here so we’ve broken this one down into a list:

As with anything you’ll find there are both pros and cons of auctioning your home and often the conclusion is made based on a general list of advantages and disadvantages.

Advantages In Selling By Auction

• Hidden sale price/expectations. Having a reserve price that stays strictly between yourself and your agent means that it’s harder for the interested buyers to research the market and have a solid understanding of your properties value.
• Competition amongst buyers. The bigger the group of bidders the higher the perception of interest in the property and the faster the competition stands to grow. With a perception of ‘missing out’ – buyers often bid above what they’d consider in a listed sale set-up.
• Sense of urgency. Being that there is a set date for sale, this will encourage bidders who may otherwise procrastinate their decision because they’re well aware that the aim of the game on auction day is to sell then property.
• Reserve price. Agreeing upon a reserve price prior to auction with the agent means the seller can rest easy knowing they are protected against losing out with the reserve price in place.
• Direct contact with most potential buyers. As briefly mentioned earlier, if the property is not sold at auction the agent will typically either pass on the details for the highest bidders are contact them on your behalf to enter negotiations seeing how close they can come to your reserve after auction day.

Disadvantages In Selling By Auction

• Not selling. If a property is ‘passed in’ at auction it can tarnish its credibility amongst potential buyers.
• No guarantees of a sale. So money spent on marketing campaigns, for example, are good for one time only (marked with auction date and cannot be recycled for another round) and are payable by the seller regardless of the outcome as we now know.
• Registration required. In some states for buyers to be able to take part real estate auctions they need to be registered in order to bid. This can sometimes discourage potential buyers who may retreat to listed houses only (where they don’t have to register).
• Slow bidding. On the flip side of potential competitive bidding is the chance that the bidding can be slow or daunting and again – can tarnish the reputation of the property with no other reasoning.

Selling At Auction Tips

You want the best possible outcome for your property so we suggest you read and follow these house auction tips and tricks so that you are best able to reach your desired outcome.

• Choosing the right auctioneer: We suggest viewing at least one auction called by the auctioneer you’re considering, requesting their recent auction outcomes (focusing on the successfully sold VS the passed) and also recent trainings etc to ensure they’re up to date with the industry and their skillset and best able to deliver you great results. All agents should offer tailored strategies so if you feel like you’re just a number, perhaps look to compare other options for another opinion or as reassurance. Checking that they’re a member of an institute like Real Estate Institute of Australia in your state is a priority as this ensures they’re committed to upholding the service and standards expected when involved with such associations.
• Agreeing on commissions/fee payable: Have this discussion with the agent up front, ensure that both parties are 100% satisfied with the figures agreed and include them in the contract signed by both the agent and the seller. Most importantly, be sure you understand and feel confident with all areas of the contract – have someone in the legal industry read over this for you if you’d prefer an additional tick of approval.
• Marketing cost: Again, the cost of marketing generally falls upon the seller and is payable whether the property sells at auction or not. With this in mind, be sure to create a budget that you are happy with regardless of the outcome (e.g. 1% of estimated final sale price) and use it to its best abilities. The aim is to attract a BIG crowd as this creates a perception of strong interest in your property and the worst thing that can happen on auction day is that nobody to show up especially when you think about all the real estate auction fees.
• Open house inspections: Use these for everything they’re worth (and they’re worth a lot!). Staging your house to show its best assets and, where possible, steer the limelight from any less desirable features is the key when potential buyers are walking through your home. Of course, a good tidy and clean of your property (inside and out) prior to any open inspections is a MUST and remember that potential buyers don’t only see your property, but they smell, touch and taste it too so – although perhaps not cookies baking in the oven, it’s always a great idea to have a snack awaiting buyers in the kitchen. Also, be sure that there aren’t any unfavourable sounds – squeaks from taps, unbearably croak floor boards or door hinges etc or smells.
• Reserve price: In auction rules, the reserve price is of course, the lowest offer you will settle on and should be heavily based on the research into comparative market value and feedback from your agent in the lead up to the auction. Although it’s tempting to tell your friends and family, we suggest that you keep your reserve price strictly between yourself and your agent leading into auction. Remember – it is your safety net.
• Three chances: Although everyone involved will be wishing for either of the first two options, there are three options in total to sell your property when auctioning your home. Before the auction takes place, during auction day and after auction day (if not sold on auction day).
• Schedule of procedures: These are handy to have on the day and should be supplied by the agent prior to the auction. They will include things you’ve likely already discussed and agreed upon (where you will be as the auction takes place, what will happen if no bids are received or you don’t reach the reserve price) but in the hype of the day, having the little things listed on paper is the best kept secret you never knew you needed.

Looking To Sell?

If you’ve still got questions about how to sell your property, it’s worth talking to your real estate agent. They’ll be able to advise you based on your property and the local area. This is why having a great real estate agent is so important, they do so much more than just fill in paperwork and show your house.

If you’re looking to sell, we’ll be able to introduce you to the top agents in your area, who will have experience selling property like yours. They’ll be able to tell  you whether selling at auction is right for you, or whether you should consider other options, like selling by tender.

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