We have a step-by-step guide to help you purchase a home at auction, which may be the difference between a successful bid or not.

Posted in: Insights


The Adelaide residential real estate market is extremely competitive this summer with an influx of buyers returning from interstate and a relative lack of supply presently. This has resulted in more properties being listed for auction than we’ve seen in recent memory. As vendors look to capitalise on market conditions, auctions may be a common thing of the future and it may appear to be scarier than it actually is. The key is to be prepared.

Prior to the auction, you may wish to consider these steps: 

Finance Pre-Approval 

The pre-approval is an indication from a lender that they will lend you a predetermined amount of money, subject to a satisfactory valuation on the property, and if required, lender’s mortgage insurance approval. 

The pre-approval may be the difference between overextending yourself in a bidding war and putting your finances in an uncomfortable or an unattainable position. 

The pre-approval is also key to speeding up the process from contract to settlement, by positioning yourself up to 2 weeks ahead in the timeline to full finance approval.

If you already have a pre-approval (please do it) then all you have to do is forward a copy of the contract and deposit receipt (should you bid successfully) to your Mortgage Broker so you’re your final finance approval can be obtained.


You will need to obtain a copy of the contract and other statutory documentation to check the terms and conditions of the sale. 

It would be wise to have your solicitor/conveyancer peruse the contract and even conduct preliminary searches. It would be terrible to find out after you have bought the house that, for example, there will be a four-lane highway built along your back fence, or that the electricity company plans to build high voltage power lines nearby, thereby lowering the value. 

Conditions (or lack thereof)

If you bid successfully at an auction the house is yours at the fall of the hammer. You will then have to sign an unconditional contract, which means there can be no conditions which might halt or delay the sale. This is where your finance pre-approval is important. 

It is very rare for the vendor to allow you to place conditions on the contract. This means that generally you must arrange everything prior to the auction, including your finance, building inspections, pest inspections, land surveys, etc. 

Also make sure the settlement date noted on the contract is suitable to you, and if it’s not, then you must negotiate a mutually agreeable date prior to the auction. Again, this is where your pre-approval is important in speeding up the process from contract to settlement.


Ensure that you have the correct deposit available on the day of the auction. This is usually 10% of the agreed purchase price which you will be required to pay immediately. If you do not wish to pay this much, ensure you negotiate this with the agent and/or the vendor prior to the auction.

You will need to pay the deposit into the agent’s trust account, usually within 24 hours. Make sure you obtain a receipt from the agent. 

If you are using a Deposit Bond then you’ll need to give them the Guarantee Certificate. 

Building Insurance 

In most states you become liable for the insured risk on the property immediately. This is the insurance policy that covers you in the event your house is destroyed by fire or other events. Your Mortgage Broker can arrange a quote for you so that you have adequate building insurance at the appropriate time. 


Notify your conveyancer or solicitor of your purchase so that they can commence the necessary paperwork and searches prior to settlement. 

Bernie Lewis Home Loans works with BLHL Property Conveyancing should you need a reliable and efficient service. 

For further information leading into an auction please speak with your Mortgage Broker or call 8300 8300.