You Won at Auction… But Now the Real Nightmare Begins
/The Contract Is Yours — Whether You’re Ready or Not
Winning at a property auction in Victoria is an emotional high.
You outbid the competition. The crowd claps. The agent smiles. You sign the paperwork on the bonnet of a car or the kitchen bench.
But the truth hits quickly — you just signed a legally binding, non-negotiable contract… and the clock has already started ticking.
As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements:
“Once the hammer falls at a Victorian auction, you’re locked in. There’s no going back. What many buyers don’t realise is that most of the real problems begin after you’ve won.”
Here’s what auction winners need to know — before it’s too late.
1. There Is No Cooling-Off Period After Auction
Under Section 31 of the Sale of Land Act 1962 (Vic), cooling-off rights do not apply if you buy at a public auction — or within three clear business days before or after a publicly advertised auction if you were offered the contract on similar terms.
So if your lender backflips, or you discover an issue with the property:
too bad — you’re locked in.
2. The Contract You Signed Is Final — Even If You Didn’t Read It
Auction contracts are prepared in advance by the vendor’s solicitor or conveyancer. They often contain:
Harsh penalty clauses for late settlement
Special conditions that override the General Conditions
No mention of defects, repairs, or condition guarantees
Land tax adjustments that may not be lawful in residential sales
At auction, you don’t get to negotiate — you take it or leave it.
If you didn’t have the contract reviewed beforehand, you may be walking into a legal minefield.
3. Finance Risks Are Now Your Problem
Even if you had pre-approval from your bank, that’s not the same as unconditional approval.
If the bank sends a valuer and they undervalue the property, you could be stuck trying to find an extra $50,000 in two weeks — or worse, be in default.
Read our upcoming article on low valuations before settlement for more on this risk.
4. You Can Be Sued If You Don’t Settle
Once the contract is signed, if you can’t settle by the due date:
You can be served with a Notice of Default
You may have to pay penalty interest (often 10%+)
You risk losing your 10% deposit
You can be sued for the difference if the property is later resold at a loss
And yes — these cases happen all the time in Victoria.
5. No Conditions Means No Protection
Unless the vendor included special conditions (which they rarely do), you don’t have a building and pest clause, you don’t have a finance clause, and you don’t have the right to negotiate post-auction.
That crack in the wall or broken air conditioning? It’s now your problem.
The property is sold “as is” unless otherwise stated in the contract — and at auction, it usually isn’t.
What You Should Always Do Before Bidding
At Victorian Property Settlements, we recommend these non-negotiables for any client considering a property auction:
Have the contract and Section 32 reviewed in full
We check for hidden conditions, illegal adjustments, and risks.Get building and pest inspections done beforehand
There’s no point bidding blind.Ensure your finance is genuinely unconditional
Pre-approval is not enough. Ask your lender to confirm.Confirm inclusions and the condition of all appliances
Don’t assume anything — get it in writing before you bid.
Conclusion
Winning at auction feels like a victory — but it’s often just the start of a stressful and risky process.
If you’re not 100% ready to sign a contract without conditions, you should not be bidding.
At Victorian Property Settlements, we review auction contracts and Section 32 Statements every day. Our advice is straightforward:
Get advice first — not regrets later.