Pre-Auction Offers in Australia. When They Work and When They Do Not

A pre-auction offer is a written offer to buy a property before the scheduled auction. If accepted, the property is sold and the auction is cancelled. If declined, the property proceeds to auction as scheduled and the buyer who made the offer may still bid on the day.

The tactic is heavily marketed by both selling agents and buyers agents, often with a strong narrative on either side. Selling agents like pre-auction offers because they convert pipeline early. Buyers agents like them because they sometimes close a deal at a price that would have been exceeded in a competitive auction. Both incentives are real and both can also mislead a buyer.

This article sets out when a pre-auction offer actually works in the buyer's favour, when it does not and the state rules that change the calculation.

How a Pre-Auction Offer Works

The buyer submits a written offer to the selling agent. The offer specifies the price, the deposit, the settlement period and any conditions (most pre-auction offers are unconditional, mirroring auction terms). The selling agent presents the offer to the vendor.

The vendor has three options. Accept the offer (the property is sold, the auction is cancelled). Decline the offer (the auction proceeds as scheduled). Counter the offer (negotiation continues).

In states that require pre-auction offers to be made on the auction contract (Victoria notably), the contract is signed unconditionally at the time of the offer, with the vendor's signature triggering the binding sale.

When a Pre-Auction Offer Works in the Buyer's Favour

Three scenarios where the pre-auction offer is genuinely the right call.

Limited competition. If the property has had a quiet campaign (low open home traffic, few enquiries, no other written interest), the buyer's offer may be the strongest the vendor will see. A pre-auction offer at or slightly above the reserve closes the deal without the risk of a competitor materialising on the day.

Vendor pressure to sell. Some vendors need to sell before a specific date (settlement on a purchase, relocation, separation). A pre-auction offer that meets the vendor's price gives them certainty. The vendor will often accept a slightly lower price for the certainty of an immediate sale.

Strong fit with the buyer's brief. If the property is genuinely the right property and the buyer would be devastated to lose it, a pre-auction offer at a credible price removes auction risk. Auction risk includes underbidding (the property sells to someone else), overbidding (the buyer pays above ceiling) and not bidding at all (the buyer freezes on the day).

When a Pre-Auction Offer Walks the Buyer Into Paying More

Three scenarios where the pre-auction offer is the wrong call.

Strong campaign with multiple bidders. If the property has had a busy campaign (large open home crowds, multiple bidder registrations, strong buyer interest), the auction is likely to produce a competitive result. A pre-auction offer in this scenario typically has to be priced above the likely auction outcome to be accepted by the vendor. The buyer effectively pays a premium to avoid the auction.

Vendor in no hurry. Some vendors set a high reserve and are willing to pass in if the auction does not meet expectations. A pre-auction offer to this vendor needs to be very strong to be accepted. In practice, the vendor will often reject the offer, take the bid into the auction as the opening price (using it as a benchmark) and then push for higher.

As an information probe. Buyers sometimes submit a pre-auction offer to "test" the vendor. This rarely works. The selling agent will share the offer's existence with other interested parties, which can attract competing offers or stronger auction bids. The buyer's hand has been shown without securing the property.

State-By-State Considerations

Pre-auction offer mechanics differ by state. The most important state-specific points.

NSW. Pre-auction offers are common. The offer is typically presented on the auction contract. A 0.25% holding deposit may be required to bind the offer. Cooling-off does not apply once the contract is signed at auction terms. Confirm the current NSW Fair Trading position on holding deposits with your conveyancer before submitting.

VIC. Victoria's underquoting rules and Section 32 vendor statement requirements mean the vendor statement must be available before any pre-auction contract is signed. Pre-auction offers are common, particularly in Melbourne's inner suburbs. The Estate Agents Act 1980 and the Sale of Land Act 1962 govern the process; confirm current provisions with your conveyancer.

QLD. Pre-auction offers are common. Cooling-off (5 business days) does not apply if the contract is signed on auction terms. The REIQ standard contract is typically used. Confirm specific requirements with your solicitor before submitting.

WA. Auctions are less common in WA than the eastern states, and pre-auction offers are correspondingly less common. Offers in WA are typically made on the Offer and Acceptance form. Confirm current practice with your settlement agent before proceeding.

SA. Pre-auction offers are accepted but less common than in Victoria or NSW. Form 1 vendor disclosure applies before any binding agreement is reached. Confirm current practice with your conveyancer.

TAS. Auctions are less common in Tasmania. Pre-auction offers are accepted where used. Tasmania has no cooling-off period for either auction or private treaty, so the day-of discipline is the same either way. Confirm current requirements under the Property Agents and Land Transactions Act 2016 with your conveyancer.

ACT. Pre-auction offers are common in Canberra. Leasehold tenure does not change the offer mechanics. Confirm current ACT requirements with your solicitor before submitting.

NT. Auctions are uncommon in the Northern Territory. Pre-auction offers are not a standard tactic. Confirm requirements with a local NT conveyancer if proceeding.

Confirm the current rules with the state regulator before submitting any pre-auction offer.

How to Structure a Pre-Auction Offer

Three principles for a pre-auction offer that has a genuine chance of working.

Price the offer at the vendor's likely number, not the buyer's hopeful number. A pre-auction offer below the vendor's reserve will almost always be rejected. The buyers agent should have an estimated reserve range from comparable evidence and selling agent conversations. The offer sits within or just above that range.

Match the auction terms. Pre-auction offers that mirror auction conditions (unconditional, 10% deposit, standard settlement) are taken seriously. Pre-auction offers with subject-to clauses (finance, building inspection, sale of another property) are usually treated as standard private treaty offers and rejected if the vendor wants auction terms.

Set a deadline. A pre-auction offer should be made with a clear acceptance deadline (typically 24 to 48 hours). Without a deadline, the selling agent will shop the offer to other interested parties and the buyer's position weakens by the hour.

Whether the Auction Still Happens After a Pre-Auction Offer Is Submitted

If the vendor accepts the offer and signs the contract, the auction is cancelled and the property is sold. Selling agents typically notify other registered interest and remove the auction marketing.

If the vendor declines the offer, the auction proceeds as scheduled. The buyer who made the pre-auction offer is free to register and bid on the day. Some buyers feel awkward about this but there is no rule against it. The pre-auction offer was an attempt to buy on terms, the auction is a different process and the buyer can participate.

If the vendor neither accepts nor declines (counters or stalls), the buyer should set a deadline and move on if the deadline passes.

A Working Example

A buyer is interested in a Melbourne townhouse listed for auction with a price guide of $1.05M to $1.15M. Comparable sales suggest a likely reserve of $1.1M and a likely auction result of $1.15M to $1.25M with competition, $1.1M to $1.15M without.

Two open homes have been quiet. Only one other party has shown serious interest based on contract requests.

A pre-auction offer of $1.13M on auction terms with a 48-hour acceptance deadline. The price is within the likely auction range, the terms match what the vendor would have signed on auction day and the deadline forces a decision.

If accepted, the buyer has secured the property at the low end of the likely auction range, removing competition risk. If declined, the buyer attends the auction with information about the vendor's price expectations.

The same offer in a different scenario. Three open homes have been busy. Eight contracts have been requested by other parties. The selling agent is openly expecting a strong result. In this scenario, a $1.13M pre-auction offer is unlikely to be accepted and may push the auction result higher by signalling buyer enthusiasm. The buyer is usually better off going to the auction with discipline and a written ceiling.

Frequently Asked Questions

Should I make a pre-auction offer or wait for the auction?

Pre-auction works best when the campaign is quiet and the buyer is committed. Auction works best when the campaign is busy and the buyer can hold discipline. A buyers agent will assess the campaign and recommend the tactic.

Is a pre-auction offer always lower than the eventual auction price?

No. Pre-auction offers that are accepted are usually at or slightly above the vendor's reserve. Sometimes that figure is lower than the auction result, sometimes higher. It depends on auction-day competition, which the pre-auction offer is designed to avoid.

Can I make a pre-auction offer conditional on finance?

Some vendors will accept a conditional pre-auction offer, but most will not. The vendor's alternative is auction, where contracts are unconditional. An offer with finance or inspection conditions usually has to be priced higher to compensate for the reduced certainty.

What if my pre-auction offer is accepted and I change my mind?

Once the contract is signed on auction terms, the buyer is bound. Cooling-off does not apply to contracts signed on auction terms in any Australian state or territory. Make the offer only if the buyer is prepared to settle.

Will making a pre-auction offer affect the auction result?

It can. If the offer is declined, the selling agent may use the offer price as the opening bid at the auction. This anchors the auction at the buyer's number and can push the result higher. The buyer needs to be comfortable with this risk before submitting.

Related Resources

• Auction Bidding in Australia. How a Buyers Agent Adds Value on the Day

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Last reviewed: 22 May 2026.