What happens after the auction? Your guide to key points in conveyancing

You’ve just completed a successful purchase at auction – congratulations! We understand that the process of an auction can be stressful. We’re here to run you through some of the key points you need to know after the auction.

Date of Auction = Date of Exchange

If you’ve placed the highest offer at an auction, provided that this is above the reserve price set by the seller, then you are the successful buyer of the property. It is important to note that the terms are fixed and there is no cooling-off period when you buy at auction, so there is no option for a change of mind once the winning bid has been placed. For that reason, we strongly recommend obtaining legal advice prior to the auction where possible.

The next steps after the winning bid has been placed are governed by state and territory legislation, but these are generally the same nationwide. Essentially, if you are the successful bidder at an auction, you will be immediately required to sign the contract and pay a deposit.

Therefore, the date of your successful auction will also be the day that contracts are exchanged. Once the date of exchange occurs, you are legally bound by the contract and will risk losing your deposit if you do not complete the purchase.

This differs from a private treaty sale, where an initial holding deposit may be held by an agent accompanying a prospective buyer’s offer – in that case, the deposit would be returned to the prospective buyer for a change of mind, or if their offer was not accepted, as contracts have not yet been exchanged.  


In all states and territories, the deposit is held in trust until settlement, most often in the real estate agency’s trust account, or that of the seller’s solicitor.

There are multiple ways in which this deposit can be paid, including by way of bank cheque, electronic funds transfer or deposit/bank guarantee. It is recommended to check with the seller or agent before the auction to find out what form of deposit will be accepted, particularly if you are considering using a deposit bond.

There are certain circumstances where the seller may ask the buyer to release the deposit money from the trust account earlier than the settlement date – this requires written permission from the buyer. From a buyer’s perspective, there is significant risk associated with this, and you should ensure you seek legal advice before agreeing to such a request. 


Your method of financing the property is important to consider prior to the auction; in particular, whether you will need to begin the process of applying for a home loan. Most lenders will issue a pre-approval prior to auction, but will not provide formal loan approval until after the exchange. It is important to ensure you act quickly following exchange to progress your finances to ensure that settlement is not delayed.

The National Consumer Credit Protection Act (2009) applies nationwide and specifies that lenders must outline any fees and charges in a pre-contractual statement, and they must also provide an information statement explaining your rights and obligations.

When you receive formal approval for your mortgage application, your lender will provide you with a letter of offer and a mortgage contract to sign; your solicitor can review this paperwork from your mortgage before you sign.


While the exchanging of contracts for the sale of the property is legally binding, the sale and transfer of property is only completed at settlement. This is typically 30 days after exchange in the ACT; however this can vary depending on the specific terms of the contract.

Settlement is the process conducted between the legal and financial representatives of both parties. Most settlements within the ACT are now facilitated through the electronic lodgement service PEXA. On the settlement date final checks will be made by your solicitor or conveyancer, such as ensuring that all banks involved are ready, and confirming that any caveats or dealings registered on title have been removed.

At settlement, all charges on the property such as general rates and water rates will be adjusted between the parties to ensure that the seller is responsible for rates up to and including the day of settlement, and the buyer liable from the day after settlement.

On settlement, the balance of the purchase price is paid to the seller in exchange for the title to the property, the deposit is released to the seller, and unless other arrangements such as early occupation have been made, the buyer will have access to the keys and can take possession of the property.

If you are interested in buying (or selling) your property through an auction, or would like to find out more about the conveyancing process, please do not hesitate to contact the BAL Lawyers Property Team on 02 6274 0999.

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