Auction Due Diligence Checklist: Everything You Must Do Before You Bid on a Property
October 8, 2026 / Written by Rich Harvey
TL;DR — Quick Summary
At auction, there is no cooling-off period and no conditions — everything must be done before you bid. This checklist covers the four phases of auction preparation: before inspection, after inspection, the pre-auction week, and auction day. Print it, follow it, and do not skip a step.
Why Auction Due Diligence Is Different From Private Sale
In a private treaty (private sale) purchase, you can include conditions in your offer: subject to finance, subject to building inspection, subject to sale of another property. These conditions give you an exit if something goes wrong after exchange.
At auction, the contract is unconditional the moment the hammer falls. You cannot include any conditions. Everything — legal review, building and pest inspection, finance approval — must be completed before you bid. If you discover a problem after winning an auction, you own the problem.
This is not a reason to avoid auctions. It is a reason to prepare methodically.
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Phase 1: Before Attending the Open Home
- Search comparable sales in the suburb in the last 90 days — establish your independent price anchor
- Check the flood overlay, bushfire overlay, and heritage listing status on the state planning portal
- Check the council zoning — what can be built on or adjacent to the property?
- Review the street view and satellite images for obvious risk factors (flight path, busy road, powerlines)
- Establish your borrowing capacity with your broker or lender before attending inspections
Phase 2: After the Inspection
- Commission a building and pest inspection immediately after your first inspection. Do not wait. Good inspectors book out quickly for auction-deadline properties. Budget $400–$700 for a combined report.
- Is a building and pest inspection compulsory before bidding at auction? — No, it is not legally compulsory. But it is essential. Buying a property at auction with undiscovered structural defects or active termite damage — without recourse — is one of the most costly mistakes a buyer can make.
- Request a copy of the vendor's building and pest inspection if one exists — but always commission your own
- Obtain the contract from the selling agent and send it to your solicitor for review within 48 hours of inspecting
- Ask your solicitor to flag any easements, encumbrances, special conditions, or unusual clauses
- Request a strata report if it is an apartment (read the minutes for disputes, special levies, and maintenance issues)
Phase 3: The Pre-Auction Week
- Confirm your finance is formally approved (unconditional, not just in principle) by your lender
- Confirm with your solicitor that the contract is acceptable and you are ready to exchange
- Review your building and pest report in detail — query anything unclear directly with the inspector
- Re-run your comparable sales research to confirm your independent valuation is current
- Confirm your hard bidding limit and write it down
- Register to bid if required by the agent (some states require pre-registration)
- Arrange your deposit cheque or bank transfer facility — you may need to pay 10% immediately on the fall of the hammer
Phase 4: Auction Day
- Arrive 10–15 minutes early — observe the crowd size and composition
- Bring identification and your deposit cheque/transfer authority
- Know your limit — it is in your pocket, written down, not negotiable on the day
- Position yourself confidently — standing near the front signals confidence to other bidders
- Bid with authority — hesitation signals uncertainty to the room
- If you win: sign the contract immediately and pay the deposit as instructed by the agent
- If the property is passed in: approach the agent immediately for first-right-of-negotiation access
Full Auction Due Diligence Checklist (Scannable Summary)
| Phase | Action Item | Done? |
|---|---|---|
| Pre-inspection | Comparable sales analysis completed | ☐ |
| Pre-inspection | Planning and overlay checks completed | ☐ |
| Pre-inspection | Borrowing capacity confirmed with broker | ☐ |
| Post-inspection | Building and pest inspection commissioned | ☐ |
| Post-inspection | Contract sent to solicitor for review | ☐ |
| Post-inspection | Strata report obtained (if applicable) | ☐ |
| Pre-auction week | Finance unconditionally approved | ☐ |
| Pre-auction week | Contract review completed and acceptable | ☐ |
| Pre-auction week | Hard limit written and agreed | ☐ |
| Pre-auction week | Deposit funds arranged and ready | ☐ |
| Auction day | ID and deposit facility brought to auction | ☐ |
| Auction day | Limit confirmed and in pocket | ☐ |
Frequently Asked Questions
Is a building and pest inspection compulsory before bidding at auction?
No — it is not legally compulsory. But it is essential best practice. Auction contracts are unconditional, meaning you cannot include a building inspection clause. If you win an auction and discover structural defects or pest damage afterwards, you own the property without recourse. Always commission an inspection before bidding.
What documents do I need to review before an auction?
The key documents are: the sale contract (reviewed by your solicitor), the building and pest inspection report (commissioned independently), the strata inspection report if it is an apartment, and the Section 10.7 certificate (NSW) or equivalent in your state, which discloses planning overlays including flood and bushfire risk.
How do I register to bid at an auction in Australia?
In most Australian states, you register with the selling agent on auction day by providing photo identification. Some agents require pre-registration before the auction date. Ask the selling agent what their specific process is when you express interest in the property.
How much deposit do I need to pay on auction day?
The standard auction deposit is 10% of the purchase price, paid immediately at the fall of the hammer. In some cases, agents will accept a 5% deposit with the balance within a short period. Confirm the deposit requirement with the selling agent before auction day and have funds ready.
What happens if I win an auction but my finance falls through?
If you win an auction without unconditional finance approval and your loan is subsequently declined, you will be in breach of the unconditional contract. You risk losing your deposit (10% of the purchase price) and potentially facing legal action from the vendor for damages. Never bid at auction without unconditional finance.
Can I access the contract before an auction?
Yes. The sale contract is typically available from the selling agent from the time the property is first listed. You should request it immediately upon expressing interest and send it to your solicitor for review well before auction day — not in the final 48 hours.
What is a Section 10.7 certificate and do I need one?
A Section 10.7 certificate (NSW) is a planning certificate issued by council that discloses the zoning, overlay categories (flood, bushfire, heritage), and development controls applicable to a property. In NSW it is required to be included in the sale contract. In other states, equivalent planning certificates serve the same purpose. Your solicitor will review this as part of their contract review.
How long does auction due diligence take?
Complete due diligence typically takes 7–14 days from first inspection to auction day. This timeline assumes you act quickly at each stage: commissioning the inspection within 24 hours, sending the contract to your solicitor the same day, and having finance pre-approved (not just in principle) before the process starts.
Can a buyers agent handle my auction due diligence for me?
Yes. Buyers agents coordinate the full due diligence process: commissioning and reviewing building and pest reports, directing your solicitor, running comparable sales analysis, confirming finance readiness, and advising on strategy. For buyers who find this process overwhelming or time-consuming, it is one of the most valuable services a buyers agent provides.
What is the biggest due diligence mistake buyers make before auctions?
The most common and costly mistake is failing to get unconditional finance approval before bidding. Many buyers attend auctions with pre-approval (conditional approval) believing it is sufficient. A pre-approval is not a guarantee of funding — it is a conditional indication. Bidding without unconditional approval exposes you to the full risk of the auction contract if your loan is subsequently declined.
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