Auction sales are unconditional on the fall of the hammer. What that means for due diligence, finance and your risk.
An auction is a public sale where a property is sold to the highest bidder, provided the vendor's reserve price is met.
A successful auction bid is unconditional immediately. There is no due diligence period, no finance condition, no builder's report clause. The deposit — usually 10% — is payable on the day.
All investigation must happen before the auction, at your own cost, on a property you may not win. That typically means:
Bidding on three properties can mean paying for three sets of reports.
If bidding does not reach the reserve, the property is passed in, usually to the highest bidder, who typically gets first opportunity to negotiate.
"I'll sort finance after" is the most expensive mistake in NZ property. If you win and cannot settle, you lose the deposit and can be sued for the shortfall.
Pre-auction offers are common. Many vendors will consider an offer before auction day, which can be made conditional. If the reports worry you or your finance is not locked down, this is often the better path.
The auction pack is not due diligence. It is prepared by the vendor. Have your own lawyer review it.
Last reviewed: 1 August 2026 · General information only, not legal advice.
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