Auction terms explained

Buying or selling at auction moves quickly, and knowing the key auction terms and phrases gives you an advantage. Our simple guide breaks down the key terms to help you navigate the process and feel prepared when it comes to auction day. If you find yourself asking "What does 'passed in at auction' mean?", "What is a reserve price?", or "What is a vendor bid?", read our auction term explainer guide below.

As is

This indicates that the property is being sold in its current condition, without any warranties or guarantees from the seller. Buyers should thoroughly inspect the property before bidding.

Bidder

Anyone who is registered and eligible to make offers on the property are bidders. Registration and identification requirements vary by state or territory, and compliance with local legislation is mandatory. If you are asking what is an auction and how to take part, becoming a registered bidder is the first step.

Cooling-off period

It's important to know that there is no cooling-off period when buying at auction. Once the hammer falls, the property is sold.

Hammer fall

Once the hammer falls, the property is sold and no more bids can be accepted.

On the market

Once the reserve is met or exceeded, the auctioneer will declare the property “on the market”, meaning it will sell to the highest bidder.

Passed in

When a property is 'passed in' the highest offer doesn't meet the reserve price and the property does not sell at auction. The highest bidder usually earns the first right to negotiate with the vendor immediately after the auction.

Reserve price

This is the minimum price the vendor is prepared to accept. If bidding falls short of the reserve, the property is passed in and does not sell under the hammer unless a post-auction agreement is reached.

Starting bid

The initial bid proposed by the auctioneer to commence the bidding process. It sets the baseline for subsequent bids and can vary depending on market interest.

Vendor bid

A bid that is made on behalf of the vendor to set or guide the bidding level. It must be clearly announced and cannot purchase the property. Its purpose is to move bidding towards the reserve price.